Committee Reports::Interim Report No. 02 - Appropriation Accounts 1993::12 December, 1994::MIONTUAIRISC NA FINNEACHTA / Minutes of Evidence

Chairman: Would you explain Mr. Russell why you are late appearing before the Committee?

Mr. Russell: A personal matter delayed me. I regret delaying the proceedings of the Committee.

Chairman: I welcome Mr. Mullarkey and Mr. Dalton. Would you introduce the officials with you, if any.

Mr. Mullarkey: Mr. MacCaffrey, Assistant Secretary, Mr. Thompson, Mr. Ryan and Mr. Gallagher.

Mr. Dalton: Mr. Michael Madden who was here for the previous matter and Mr. Richie Ryan.

Chairman: The Committee decided, in the light of the hearings on the Beef Tribunal, to further investigate the cost of legal fees in this jurisdiction. It was prompted to do so because in evidence one civil servant said that the levels pertaining in the Beef Tribunal were a lot lower than those pertaining in the United Kingdom. Resulting from that statement the Committee decided to ask the Comptroller and Auditor General if he would do a comparative study, which he did. That study has been published and he did a comparative study which compared, for instance, the legal fees of the Beef Tribunal with the legal fees payable in the Scott Inquiry in the United Kingdom. The results of those enquiries showed that Queen’s Counsel in the Scott Inquiry were paid £800 per day plus VAT for both sitting and non sitting days. VAT being payable at 15 per cent means that they were getting £920 a day gross compared to Senior Counsel for the State and for the Tribunal who were getting £1800 per sitting day and £1000, if I recall correctly, for non sitting days, whereas Junior Counsel were getting £1400 for sitting days and a proportion of it for non sitting days. In the United Kingdom there was one Queen’s Counsel involved in the Inquiry and two staff barristers who were paid their salaries and no fees. We were told that a total of 116 lawyers were involved in the Beef Tribunal for varying lengths of time. We were also told by way of correspondence when we queried how come the £1800 per day was fixed compared to the levels pertaining in Britain, that the Chief State Solicitor’s Office believed that the Taxing Master, if asked and when asked would fix that sort of level. So the purpose of this inquiry is, if that is the case, to whom is the Taxing Master accountable and how could he justify fixing fees that are more than twice the level or about twice the level pertaining in the United Kingdom. There were some further suggestions that perhaps the Comptroller and Auditor General’s picture did not tell the whole story in relation to these and that really there are higher fees in England. Reference was made to the fact that an eminent Counsel in the United Kingdom, Mr. Michael Mansfield QC had said on the Late Late Show some time ago that he was astonished at the level of fees here and that even the fees paid to Counsel in the Scott Inquiry were fees that he would not be able to charge and we have the transcript of the relevant section of the Late Late Show here. I will read it for the record. Extract from the Late Late Show on 13 May, 1994.

Joe Duffy: The Scott Inquiry was a public inquiry like our Beef Tribunal. If you as a QC had worked at the Scott Inquiry in Britain how much would have been paid per day?

Michael Mansfield: The Counsel representing the inquiry has been receiving something in the region of £600 per day. I do not get that.

Joe Duffy: If you were to move to Ireland which I suggest you do very quickly, do you know how much you would get at a similar inquiry?

Michael Mansfield: I will be castigated for this but I think it is obscene.

He went on to say about the number of unemployed in England etc but they were the relevant issues.

That is the background to this inquiry by this Committee. I know that in the Courts and Courts Officers Bill now before the House there is a proposal to give the Minister for Justice some control over a scheme of fees which the Taxing Master operates under the superior court rules. Perhaps we will start by asking Mr. Dalton is this the first time such power has been taken by the Minister for Justice or has there ever been any control at all by the Minister for Justice or the Minister for Finance or anywhere else or is this a new power?

Mr. Dalton: Firstly, nothing I say today is intended as a defence of the fees paid in the Beef Tribunal. I would not set out to do this. The second thing I want to make clear is that the Department of Justice had no involvement whatsoever in the Beef Tribunal in determining the fees and so on. The position in relation to the powers of the Taxing Master, was explained by Mr. Richie Ryan at the last meeting. He explained that effectively the Taxing Master’s powers had been totally eroded by virtue of a series of court decisions. The test which had come to be put in place was an objective test, in other words the Taxing Master had to pay whatever bill of costs was presented or had to sanction it unless it could be said that no solicitor acting reasonably and prudently would not pay the bill. That test meant that a very large number - according to the Taxing Masters - of bills were simply paid though they were quite high. They could not challenge them. What the new Court and Court Officers Bill proposes to do is provide for a subjective test. In other words, it is what the Taxing Master, in his own discretion, believes to be right. The expectation is that this will give the Taxing Masters much more power. As regards the making of Costs Rules, my understanding of the provision - I would have to refresh my memory on the detail of it - is that if the Rules Committee fail to make rules covering fees, then the Minister may make the Rules herself. To the best of my knowledge, that is the first time that this kind of power has been taken by the Minister. I think it might mislead the Committee to say that this will make a huge difference in fees, but it is important that if the Rules Committee do not make the Rules, then the Minister may make them herself.

Chairman: We should read the section into the record. My reading of it goes further than you may feel. Perhaps Mr. Dalton could read the section for us.

(a)a rules-making authority is requested by the Minister to submit for the concurrence of the Minister rules governing questions of costs including scales of solicitors’ costs and counsels’ fees and

(i)the rules-making authority fails to submit such rules within 3 months of the request, or

(ii)such rules as have been submitted contain scales of either solicitors’ costs or counsels’ fees or both which are, in the Minister’s opinion, excessive, the Minister may, by regulation, prescribe appropriate scales of solicitors’ costs and counsels’ fees.

(2)The consent of the Minister for Enterprise and Employment will be required under the provisions of the Prices Acts, 1958 to 1972, for the exercise by the Minister of the power of the Minister under subsection (1) of this section.

(3)Every regulation made under this section shall be laid before each House of the Oireachtas as soon as may be after it is made and if a resolution annulling the regulation is passed by either such House within the next 21 days on which that House has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

The consent of the Minister for Enterprise and Employment will be required under the provision of the Prices Acts, 1958 to 1972. The exercise of the power of the Minister under subsection (1) of this section which is the one I quoted. In relation to subsection (3) every regulation made under this section shall be laid before the Houses of the Oireachtas as soon as may be after it is made and if a resolution annulling the regulation is passed that is the usual provision within 21 days. The regulation shall be annulled accordingly but without prejudice to the validity of anything previously done thereunder.

Chairman: In other words the Minister may request a scheme of fees to be submitted to him for his concurrence.

Chairman: Is that the first time that any Minister has had that power or will take that power?

Chairman: Mr. Mullarkey, has the Minister for Finance had any power to control fees up to now?

Mr. Mullarkey: No, the only power we had was in so far as we sought to influence the fees being set by the Attorney General’s Office as a major player in the market but we did not have any direct legislative or statutory power to control fees.

Chairman: Did you have power or influence or did you take steps to control the fees paid by the Attorney General’s Office?

Mr. Mullarkey: In so far as fees came to us for approval we regularly were trying to exert downward pressure on them. There was regular correspondence between us in relation to proposals for the payment of fees. At the end of the day I suppose market forces generally played a large part but there would have been correspondence between us and the Attorney General’s Office would have been aware that we were a back stop downward pressure in that area.

Chairman: In relation to the fees of £1,800 per day, which has shocked everybody, am I right in recalling that those fees were fixed by the Attorney General without getting your consent or needing your consent?

Mr. Mullarkey: I explained the last day that the way the thing transpired was that the Beef Tribunal fees were a charge on the Agriculture Vote and the Attorney General’s Office advised on the level of fees to the Department of Agriculture who, because the Beef Tribunal was a relatively novel involvement for them, lost sight of the fact that they should have had Department of Finance sanction for the level of fees.

Mr. Mullarkey: I sought to explain that the last day. The Department did not come to us for sanction because they were not used, in the way we would have been, in dealing directly with the Attorney General’s Office on the level of fees.

Chairman: I want to ask Mr. Russell a question. Could you describe to us what controls, if any, existed within the Attorney General’s Office for dictating the level of fees paid? I think I am right in recalling that in the Tribunal’s case the fees were fixed by the Attorney General without consultation with you?

Chairman: Other than that, which seemed to me to be an extraordinary situation, is there some scheme of controlling fees or keeping the lid on fees or deciding what is a reasonable level of fees? Could you describe that?

Mr. Russell: The Attorney General is very much in contact with the market, that is to say the going rate charged by barristers, personally sanctions every fee, large or small, paid by the State in legal cases. That includes, of course, cases of any kind falling within his remit. It would not apply, of course, to cases falling within the remit of the Director of Public Prosecutions. In regard to the fees in the Beef Tribunal the Attorney General formed the view that the level of fees was appropriate, which he recommended. I would not regard myself as being at all as well qualified as the Attorney General to say what the going rate is currently. I would not be in a position to prefer my own opinion to his in that matter. Certainly the pattern consistently is that the fees which the Attorney General sanctions for his Counsel are less, by a substantial margin, than the market rate. This is a perennial source of complaint by the Bar. They believe that the State is getting legal services more cheaply than a member of the public would have to pay for them and this is a source of complaint. This opinion is borne out objectively by the results of taxation because when costs are taxed by the Taxing Master -

Mr. Russell: By taxation I mean that at the end of any legal proceedings the client may have the bill presented to him by his solicitor taxed, and the losing party in a case who has been ordered to pay the costs of the winning party likewise may have his bill - the bill presented to him by the winning party - taxed by the Taxing Master, unless, of course, the parties agree between themselves to pay without incurring the trouble and expense of taxation. Taxation is carried out by the Taxing Master in High Court cases and by the county registrar in Circuit Court cases and it consists of scrutinising the bill which the party has presented to him, a bill which is highly itemised. Letters and conversations, etc., are charged for separately. This bill is scrutinised by the Taxing Master for the purpose of seeing whether any of the individual items or the total bill is excessive. The Taxing Master - of whom there are two - is a permanent civil servant and a lawyer and his role is to guard the public interest by ensuring that excessive fees are not charged by the legal profession. It is a system which is unique to the legal profession because in other professions and occupations the party concerned does not have the benefit of an independent scrutiny by a third party of the propriety of the bill presented to him.

Chairman: I will call Deputy Foley but I want to take you up on one point. You said there are perennial complaints from the legal profession that fees sanctioned by the Attorney General’s Office are less than they would be. Would this apply to the £1,800 per day?

Mr. Russell: The answer to that question will emerge with great clarity when the bills of costs are put in by the various parties to the proceedings. We will then see how much they have paid their Counsel and how much a prudent solicitor instructing counsel regards as appropriate.

Chairman: Would you not agree that there is a very real air of detachment from reality that people would consider that £1,800 per day is too little? The vast bulk of the public and indeed of every other administrator that I have spoken to consider that these fees are indefensible at that level and that they are greatly in excess of what is paid in an approximate jurisdiction.

Mr. Russell: I am certainly very much aware of public disquiet about these fees. The advantage, however, of the system which I have described is that there will be an objective test to see who is right and who is wrong in this particular area when the bills of costs of the other parties to the Tribunal are put in. You will recall, Chairman, that there were a total of 116 lawyers involved. When their bills come in we will be able to see what they have charged and one will have a basis of comparison there. As regards proceedings in another jurisdiction, I understand you to refer to the Scott Inquiry. I do not know to what extent useful comparisons can be made between proceedings of a particular type in another country and proceedings of a particular type in this country. For the purpose of usefulness one must compare like with like and I am not aware that one can do so at all in the case of the Scott Inquiry.

Chairman: The study was undertaken by the Comptroller and Auditor General at our request because it had been suggested to us that the level of fees being paid for the Beef Tribunal were actually on the low side compared to what is going on in Britain. Of course the Comptroller and Auditor General’s report demonstrated that that was not the case in the case of the Scott inquiry. Every other inquiry that we have made and the allusion I have made to Mr. Mike Mansfield suggests that the fees being charged in Britain by barristers in general is lower than here by a considerable amount. Even though there had been inferences to the contrary by some witnesses before this Committee, no evidence has been produced to suggest that that is the case. All of the evidence is that barristers fees here are in excess of what they are in Britain.

Deputy Foley: When we last discussed the question of fees certain recommendations were made and on that basis I want to ask as a result of the legal fees paid to Counsel at the Beef Tribunal, have the Comptroller and Auditor General’s office, the Department of Justice and the Department of Finance drawn up any terms of reference with regard to such future such tribunals or legal representations if so required by any Department?

Mr. Mullarkey: The Committee will be aware that certain guidelines were circulated in the course of the summer which would apply in future which would involve an inter-departmental discussion in the first instance on the level of fees and which would set a cap on fees payable in the context of a tribunal and that would imply that if and when one ran up against the cap there would be a review to take stock of the position at that time and to consider what might be done about the level of fees in the future.

Mr. Mullarkey: Not at this point; it will be dealt with in the context of the general fees situation at the time of any tribunal in the future which would arise.

Deputy Foley: I wish to ask you a reasonable question, do you think they would be far less than what was paid in connection with the Beef Tribunal?

Mr. Mullarkey: One would have to have regard to the going fee at the time for the quality of lawyer for which you were looking. If it were the type of tribunal where one could settle for a second rank or lower rank lawyer, then you could go for a lower pitched fee. A lot would depend on the importance and the significance of the tribunal and the significance of the issues involved. One would have to take a pragmatic decision in the context of whatever future tribunal arose.

Deputy Foley: Based on the current fees, if this should happen next month and if you were to draw up a scale of fees, would it be less than what was paid for the Beef Tribunal?

Mr. Mullarkey: We would have to take the advice of the Attorney General’s office in the first instance on the level of fees generally in the market, what one could get away with, the prospective length of the tribunal, the significance of the tribunal and what level or rank of lawyer you could settle for. It would differ if it were a relatively uncomplicated situation where one could look for a middle ranking or lower ranking Counsel rather than a very prominent lawyer.

Deputy Foley: Based on your intuition and on the legal representation that you had at the Beef Tribunal, if that was to arise next month, do you honestly think the same level of fees would be paid?

Mr. Mullarkey: That is a hypothetical question. One of the lessons we have learned from this is that it is very difficult to predict the duration of a tribunal. Also we are more conscious now that very senior and very prominent Counsel may not be all that keen on being involved in an extended tribunal. They generally show a dislike for protracted cases because they tend to lose out on contact with their regular clients and may do so in the future.

You could be facing into a situation where you might be looking at a different level of the market as to where you would go but again would a Government or a tribunal in those circumstances settle for less than the very best lawyers. That is the type of issue you would be confronting.

Deputy Foley: Mr. Russell said that the Attorney General was on top of the market situation but obviously he must not have been when you had the scale of fees paid in Britain in connection with the Scott inquiry.

Mr. Russell: The fees quoted for the Scott inquiry are less than the fees paid in the Beef Tribunal but in order to learn any lessons from those fees, one would have to see whether the Scott inquiry was a similar proceeding as the Beef Tribunal. I do not think it was. For example, to take only one of a number of differences, the terms of reference of the Scott inquiry, the matters they had to inquire into, totalled 11 lines. This appears from the Comptroller and Auditor General’s report. The terms of reference of the Beef Tribunal totalled 36 pages. The scope of the inquiry of the Beef Tribunal was very much wider than the Scott inquiry. In addition to that the proceedings - - - - - -

Deputy Broughan: Was the Scott inquiry not inquiring into a very complex issue?

Mr. Russell: In addition, there were substantial differences in the procedures which governed the conduct of the two bodies. For example in the Scott Inquiry, witnesses were not examined on oath. In the Scott Inquiry witnesses were not allowed legal representation and cross examination by parties who felt their reputations and indeed their livelihoods might be harmed was not permitted. Such proceedings would not be possible in this country, would not be permitted by the Constitution, and would, I suspect, be deeply resented by members of the public who found their reputations and livelihoods put in jeopardy by allegations made against them, which they were not permitted to defend adequately. These are but some of the differences between the Scott Inquiry and the Beef Tribunal and therefore it seems to me that comparisons of the two bodies are not very useful and that therefore the fact that fees paid in the Scott Inquiry were at a particular level and fees in the Beef Tribunal were at another is not necessarily useful. It occurs to me that there are other inquiries which were conducted in Britain where the procedures which in this country are considered essential were in fact followed and protection given to parties and witnesses. There were a number of those and indeed the Scott Inquiry, in the manner in which it was conducted, represented a departure from the rules laid down by a Royal Commission into inquiries which set out the protection which should be given to members of the public involved, such as the right to defend themselves by lawyers against allegations. These, for some reason with which I am not familiar, were not followed or allowed in the Scott Inquiry.

Chairman: None of those considerations affect the daily rate. That is the important point.

Mr. Foley: Do I understand that the Attorney General has on record that he stands over the fees paid in connection with the Beef Tribunal?

Mr. Russell: That Attorney General was not the Attorney General who recommended the level of fees. It was his predecessor.

Chairman: It was his predecessor who fixed the £1,800 and it was he who fixed the non-sitting day rate of £1,000, is that correct?

Mr. Russell: The reduced fee for non-sitting days was fixed by the last Attorney General.

Deputy Durkan: Could I ask Mr. Russell, in relation to the level of fees, he has made reference to the Scott Inquiry and while I appreciate that people are entitled to get the best advice that is available, surely the only other parallel that I can see from the report that was made available to us in terms of cost was the Iran Contra affair in the United States which caused a colossal furore in relation to the same cost. That cost was considerably less than our own Tribunal. The cost was less than half. I wonder what Mr. Russell’s comments might be in relation to that given the average income per capita in the United States as compared with the average income per capita in this country and the cost in relation to similar services.

Mr. Russell: I am afraid that I do not know the average per capita income in the United States. I always had the impression that legal expertise in the United States was a rather expensive commodity but other than that I cannot say.

Mr. Durkan: If it is a rather expensive commodity in the United States, this investigation lasted for seven years at a total cost of $33 million. Notwithstanding the high cost in the United States it compares favourably with our costs here for an investigation that did not go on for that long. Is it not true to say that if the costs in the United States are high, comparatively they must now be rating four to five times higher here for this type of service.

Mr. Russell: I do not know how the Iran Contra inquiry was conducted in the United States. I do not know how many lawyers were involved in it. As I understand it they have a system of special Counsel who is appointed to examine matters. I do not know whether parties are allowed to be represented before it and I do not know how many lawyers are involved for how many parties. I do not know if there were 116 lawyers involved in the Iran Contra affair so unfortunately I am not in a position to make any useful comment. One might say as a general proposition in answer to comparisons with other countries - valid or otherwise - that if one wishes to engage a lawyer in this country it is probable that he will say to you “I am not terribly interested in what lawyers in other countries charge, this is what my charge will be if you want my services”. I suspect that would be the case. Obviously it is a matter for negotiation and I think it is right to say that when the fees were recommended by the Attorney General in 1991 nobody had the slightest idea that the Tribunal would last as long as it did. If there were to be another tribunal tomorrow it is probable that the various agencies involved would approach it with the benefit of the hindsight which has been gained as a result of the Beef Tribunal.

Mr. Durkan: Notwithstanding the benefit of hindsight, could I ask Mr. Russell, when the Attorney General approved the fees, given the likely complexities of the investigation, would it not have been a wise decision to specify a length of time in respect of which those fees might have applied, for example, for a period of six months or a year and would it not have been wise to provide for a review in the contract in some way that if the investigation went on for an extraordinarily long period, that it would have been possible for the State to safeguard itself in terms of legal costs by interposing a condition in the contract which would allow for periodic reviews.

Mr. Russell: Certainly if there were another tribunal tomorrow I believe that all those matters would undoubtedly be addressed in seeking to agree fees with Counsel in advance.

Mr. Durkan: Was it not always the practice in the event of a case in respect of which the State might be liable for fees dragging on for an extraordinarily long time, that some condition would be applied or interposed in the contract which would allow for reviews or changes in fees?

Mr. Russell: I do not think that is the case. I am not aware that that is a general proposition. I have heard it asserted though not by anybody who I thought was familiar with the situation in the legal market. It is as likely that if Counsel knew how long a case would last and if they knew in advance that it would last a particularly long time they might take either of two alternative courses of action to the one you have suggested, namely, agreeing to their fees being reduced. They might want their fees increased, or they might refuse to take the case, if there was such a term in their contract. These are the possibilities which are present in a free market. If there were another inquiry tomorrow I believe all the considerations you have mentioned would most certainly be addressed on that occasion.

Mr. Durkan: Notwithstanding the existence of the free market, the points you have raised as to why these revisions could not have taken place and given that the free market will still prevail in the future, how do you envisage that a revision could take place at all if as you have stated you are not aware of any instance in the past where a revision has taken place in respect of an ongoing inquiry whereby the State was liable for legal fees. I would emphasise that point. I would have thought that in the past the State might have asked for a review in similar instances in the case of long drawn out inquiries or engagements on behalf of the State.

Mr. Russell: There has not been, to my knowledge, a three year case before. The Tribunal lasted three years. I do not believe there has ever been a three year case before. I am not aware of one. I do not think there has ever been a case remotely approaching three years in duration in which the State has been a party. It is always open to parties to negotiate a contract. I have no doubt that in a future case an attempt would be made to embody in the contract a revision clause and a cut-off point for the number of days at which point the fees would change. I have no doubt that an attempt will be made to achieve those ends. Obviously whether one would get the Counsel whom one thought best for the job under such a contract remains to be seen.

Deputy Durkan: You said that the Attorney General personally authorises in similar instances the appointment and the agreement in relation to fees etc., having regard to the market rate at that particular time. Surely the market rate which prevails in this country is what you refer to? In those circumstances are you telling me and the Committee that the standard rates of legal fees and if I or members of the Committee were barristers that we could command those kind of rates over a protracted period in respect of a single contract?

Mr. Russell: If there was another Beef Tribunal with 475 witnesses, the same number of parties - who themselves were very adequately furnished with the best Counsel and whose interests certainly involved demolishing any case put up by anyone who differed from them - if there were such an inquiry in the morning I cannot forecast how barristers of the State’s choice would react to a contract of the type you mention. The effort would undoubtedly be made to get the right Counsel at the right price but Counsel are free to refuse a case if they wish.

Deputy Durkan: You appear to be stating that in the event of a similar inquiry occurring again in the future, perhaps the costs would be similar or even higher by virtue of the unwillingness on the part of some people to work at any rate lower than that which was the experience in this case.

Mr. Russell: One would hope that one would get Counsel of the right quality - and that depends on the nature of the particular proceedings - for lesser sums were paid in the Beef Tribunal. One would most emphatically aim at that particularly if there was any question that the Tribunal might last a long time, but I merely say that it might not be possible to secure the Counsel of one’s choice. I do urge consideration of what I have already said, that we will see when the other bills of costs come in, what the going rate is.

Chairman: The concern of this Committee is that the fees are so high in this jurisdiction compared to other jurisdictions.

Deputy Durkan: Prior to the appointment of the various Counsel, was any projection carried out in the Office of the Attorney General at the likely length of the Tribunal of Inquiry and was that taken into account. Did anybody make any reference to the likely long drawn out nature of the inquiry before the appointments were made and the costs agreed?

Mr. Russell: No person in Ireland knew how long the Tribunal would last nor could they have envisaged that it would last that long but I am not privy to the conversations the then Attorney General had with the Counsel of his choice.

Deputy Durkan: Would it not have been prudent, given the controversy that surrounded the whole issue at the time to anticipate that it might go on for an extraordinarily long time or longer than usual.

Mr. Russell: No, I do not believe anyone anticipated that the Tribunal would last as long as it did. On the contrary, at various stages during the Tribunal estimates were made, sometimes by the Tribunal itself which was in the best position to know, and those estimates were wrong. In the event the Tribunal lasted longer because when you have a multiplicity of parties and a multiplicity of allegations to be investigated, and naturally a multiplicity of people defending themselves against allegations, the proceedings are longer than they would be if the terms of reference were other or if the number of parties were less. I do not want to appear to be unhelpful on this but I think it would be unwise to make any promise to the Committee that one could get Counsel cheaper than then. I would certainly hope so and given the lessons we have learnt from the Beef Tribunal every effort would be made to do so.

Mr. Russell: I became aware of the amount of the fees at the time they were fixed which was July 1991. I did not form the opinion that they were excessive because I knew that the Attorney General was in the best position to know what the right fees should be.

Deputy Doherty: Were you concerned at any time during the course of the Tribunal about the size of fee being paid or being contracted on?

Mr. Russell: As a taxpayer I was; as an Accounting Officer I had no function.

Deputy Doherty: I did not ask you about your function yet. Did you at any time after you became aware of the rate of fee, show any concern about the level of fee?

Mr. Russell: Since my duties did not require me to form a view on the matter I refrained from doing so.

Deputy Doherty: Your function is that of Accounting Officer for the Vote of the Attorney General. What does your responsibilities include as Accounting Officer?

Mr. Russell: The normal functions of an Accounting Officer for his Vote but I have no functions in relation to any other vote.

Deputy Doherty: Has there been any occasion or any time that you felt you had a responsibility to give advice, even when not asked for it?

Deputy Doherty: As Accounting Officer, would you not feel in view of the fact that the Attorney General had responsibility for the amount of fee agreed, that you should have given a view?

Mr. Russell: Because I had no reason to believe that the Attorney General was not best equipped to form that opinion and no fees were being paid out of the vote for which I have responsibility.

Mr. Russell: Where a fee has been suggested by Counsel, for example, Counsel appearing for the State, and I formed the view it was excessive, or on occasion I formed the view that he deserved more, but that is comparatively infrequent.

Mr. Russell: In comparatively recent times. A great deal of public debate - much of it in this Committee - has taken place in the last two years.

Deputy Doherty: Would you normally form an opinion as a result of learning from the public of a disquiet or would you have any opinion if you heard of public disquiet on the matter that was dealt with personally by your Attorney General?

Mr. Russell: Where public disquiet affected a matter for which the Attorney General has responsibility, an ongoing responsibility, I would certainly draw it to his attention if I thought he was not aware of it himself.

Deputy Doherty: Is the Attorney General’s function in this matter distinctly separate in the absolute from you?

Deputy Doherty: Distinctly separate and removed independent of you in its entirety.

Deputy Doherty: The fixing of the amount or indeed the choice of barristers.

Mr. Russell: There are not written contracts ever in the case of a barrister by the State or by anybody else.

Deputy Doherty: When were you consulted, Mr. Russell, about the amount of fee?

Deputy Doherty: How soon after the agreement between the Attorney General and barristers on the fee was that?

Mr. Russell: I do not know but I suspect it was quite soon because it was obviously necessary to put in motion the financial aspects of the matter because there was a great deal of urgency expressed about the necessity to set up the tribunal quickly and to announce who was engaged for the various parties, so I am sure I was told by the Attorney General of these fees very soon after he agreed them with Counsel, but I do not know.

Mr. Russell: I was asked by the Attorney General to inform the Accounting Officer for the Department of Agriculture of the fees, which in the Attorney General’s opinion were appropriate.

Deputy Doherty: Did you not have any reservation at all about the amount agreed?

Mr. Russell: No, I did not think I was qualified to substitute my opinion for the Attorney General’s and I did not form any opinion on the matter.

Deputy Doherty: You gave an opinion today that the Attorney General was best suited to decide on the amount having what you believed was a knowledge of the market place. When did you arrive at that opinion or did you always hold that opinion?

Deputy Doherty: Would you say in matters to the fixing of fees that you would have responsibility for that the advice that you would seek on that would be from the Attorney General?

Mr. Russell: The system of fees in ordinary cases is that the fees are fixed after the event and that is an important distinction between the Beef Tribunal and what I will describe as ordinary cases - ordinary cases which I suppose amount to 99 per cent of the Attorney General’s legal business: after the event the Attorney General fixes the fee. In the Beef Tribunal, Counsel wished to know in advance what fees they were going to get before they agreed to act.

Deputy Doherty: What criteria do you use in fixing fees if you do not know the market place?

Deputy Doherty: You never fix fees. What recognised criteria existed in the market place in respect of fees for the Tribunal that would not be a regular requirement or a regular activity as against ordinary day to day fee arrangements and fee payments? How would the Attorney General be expected to have a knowledge of the market place as you know or believed him to have had?

Mr. Russell: He would know how much Counsel of a particular degree of seniority and reputation would charge for absenting himself for an indefinite period from the Four Courts, which is his place of employment, to devote himself full-time to a particular proceedings which would never be repeated and which might or might not enhance his reputation but which would certainly take him away for an indefinite period from the market place where he hopes to resume his livelihood when the Tribunal is finished. He would know what such a person would charge.

Deputy Doherty: Have you been asked by any of your colleague Accounting Officers, either in Finance or Justice or elsewhere including Agriculture, for your views on this whole matter?

Mr. Russell: I am familiar with what I believe is the unease of other Accounting Officers about these fees certainly.

Deputy Doherty: Have you been consulted, Mr. Russell, personally as the Accounting Officer in the Department to which you are attached by any Accounting Officer from any Department about these particular fees?

Deputy Doherty: Has no Accounting Officer ever spoken with you and requested your view or discussed his concerns or asked if you had any concerns or if you would give any advice or if you had any input to make into any method by which a more appropriate fee might be decided upon in the future?

Mr. Russell: I am sure in the future if there is another tribunal or anything like it Accounting Officers in the relevant Departments will be very conscious of the lessons learned from this Tribunal.

Deputy Doherty: Did any Accounting Officer ask you at any time since the fees that are in question were agreed and since public disquiet has become widely known even by yourself at this time did they ask you at any time, your opinion or ask you to make any input concerning the fees in question?

Mr. Russell: The Accounting Officers of the Department of Finance and of Agriculture expressed unease about the level of the fees.

Mr. Russell: I have not finished answering your first question and I would like to do so. The Accounting Officer of the Department of Agriculture asked me whether it was possible to renegotiate the fees. That was the only consultation with me by any Accounting Officer that I can recall.

Chairman: That was after the question of renegotiation had been raised by this Committee.

Deputy Doherty: Could that letter, Chairman, be made available to the Committee through you?

Deputy Doherty: I take it that was after the Tribunal was over that that consultation occurred.

Chairman: This has been the subject of correspondence on which the Committee is to proceed.

Deputy Doherty: Would you read the letter from the Accounting Officer in the Department of Agriculture, Food and Forestry?

At a meeting of the Public Accounts Committee on 24 June, 1993, I was requested by the Chairman to consider, with the Attorney General, the possibility of renegotiating the level of fees paid to legal representatives engaged at the Tribunal of Inquiry into the Beef Processing Industry.

I would welcome your views at an early date on the feasibility of pursuing such a process of renegotiation and, if it is considered feasible, from whom such an initiative should most appropriately come.

I have consulted with the Attorney General in regard to the inquiry made of you by the Chairman of the Committee of Public Accounts as to the possibility that the fees might be renegotiated. The Attorney General is of the opinion that there is no contractual or other legal basis for asking the Counsel concerned to return fees already paid to them or where the fees have not yet been paid to them to accept fees of less amount than the fees that have been agreed with them.

Those fees were assessed by the Attorney General for the time being and in the case of the fees payable to Counsel for the Tribunal, by the president of the Tribunal also, as being of proper and appropriate amount having regard to the nature of the work. The costs accounting section of the Chief State Solicitor’s Office has today confirmed on inquiry by me that they have no doubt but that those fees would be allowed by the Taxing Masters were they to go to taxation against another party.

A request to Counsel, unsupported by good reason, for return of fees paid or for acceptance of fees of less amount than those agreed would be likely to cause damage generally to the State’s reputation as a retainer of Counsel.

Deputy Doherty: Did the Accounting Officer for the Department of Agriculture, Food and Forestry ask your opinion directly or did he ask you to consult with the Attorney General?

Deputy Doherty: In the letter you received on 21 June, did he ask you to consult with the Attorney General or was it your opinion he asked for?

Mr. Russell: I have read what he said. He said: “I would welcome your views at an early date on the feasibility of pursuing such a process of renegotiation and if it was considered feasible from whom such an initiative should most appropriately come”. I took the view that I should discuss that matter with the Attorney General and I did.

Deputy Doherty: It appears the Accounting Officer for the Department of Agriculture, Food and Forestry, in writing to you, was of the opinion that you had some input into this and that you had some view to express in relation to the fees.

Mr. Russell: It would be normal for him to write to me. I would have thought it not normal for him to write directly to the Attorney General.

Deputy Doherty: Would it not be normal for him to know that you had no function in the fixing of these fees?

Mr. Russell: He had been asked a question by the Committee of Public Accounts and being a responsible officer he thought he should pursue it and he did.

Deputy O’Malley: I have noted what you said that the Attorney General personally approves all fees large and small.

Deputy O’Malley: Is it not remarkable that the Attorney General would involve himself in the fixing of the fees in every case even where the fee to a Counsel is as little as 25 or 50 Guineas when we are told that he does not involve himself by all accounts in the substantive examination of all cases that come into his office?

Mr. Russell: The system which has always obtained in the Attorney General’s Office is based on the recognition of the fact that the Attorney General, as the person with the most expertise in this matter, should be involved in the matter personally.

Deputy O’Malley: Why bring the Attorney General into a question of whether or not some Counsel should get 50 Guineas and not bring him in on a much more substantive question of law or procedure that might have to be decided?

Mr. Russell: Because the best method of dealing with any particular matter is the method that is used in the Attorney General’s Office.

Mr. Russell: All matters. Obviously I am referring particularly to the matters you are raising and which are appropriate to the Committee, namely, the expenditure of public moneys.

Deputy O’Malley: Is it not unusual that the attention of the Attorney General seems to be given in priority to Counsel’s fees and that other substantive matters of law and procedure seem to take second place to the fixing and agreement of Counsel’s fees?

Mr. Russell: I have never come across an instance of the Attorney General neglecting to discharge a function which was more important than fixing fees. There is no question of the fixing of fees taking priority over other matters or displacing other matters.

Deputy O’Malley: Twice in your evidence this morning you said that when the taxation of the costs of other parties, other than the State in the Beef Tribunal, took place and when those costs were drawn and submitted that that would show whether or not they were out of line with the fees that were fixed by the Attorney General and that if they were roughly the same that that would show that what the Attorney General had fixed in 1991 was correct. Could I put to you that that proposition does not hold up and what has happened in this instance of the Beef Tribunal is that the Attorney General set the market and not the other way round? Why should any Counsel, particularly of substantial standing - in some cases of higher standing than those who represented the State - take less than what the State has paid particularly as they were on some risk of not being paid at all whereas those who were appearing for the State were on no risk?

Mr. Russell: I have no doubt that the majority of Counsel who appeared at the Tribunal fixed their fees before the Tribunal began. I do not know that but I believe it. Therefore, the controversy and claims that the fees are excessive would not have affected that matter. It is quite likely that other Counsel did not know what was the nature of the agreement with Counsel for the State at the time. They agreed their fees with their clients. There is not much likelihood of the Attorney General having set the market, leaving aside entirely the very important factor that different Counsel had different roles to play in the Tribunal. Some were engaged in defending the interests of people whose livelihood and reputation was very much at stake, others were engaged in defending the interests of people whose involvement in the Tribunal was more peripheral. Therefore, I do not know what lessons Counsel for other parties might usefully draw from the fees fixed by the Attorney General if they knew what those fees were at the time they fixed their own fees.

Deputy O’Malley: Did it not become a matter of public knowledge at least within the legal fraternity soon after the Tribunal started what the fees were?

Mr. Russell: I do not know when it first became a matter of public knowledge what the fees being paid by the State were but at that point I have no doubt the fees had been agreed because, I repeat, I believe that most of the barristers who were appearing before the Tribunal - certainly for any party of substance - would have fixed their fees in advance with their client before they accepted the brief.

Mr. O’Malley: Those who were fortunate enough to appear for parties of substance no doubt would, but the reality Mr. Russell, is that not all those who were represented legally before the Tribunal were what you would call persons of substance, in the financial sense of course.

Mr. Russell: I am sure that the fees marked by Counsel for each party represented the burden of work which representing the interests of that party required. In other words I do not think for a moment that every Counsel appearing in the Tribunal marked fees similar to those paid by the State. I would be astonished at that but I am sure a number of them did and I suspect that taxation will reveal a number of them charged more. We shall see because at the moment the criticism of the fees paid by the State is based - if I may say so - on subjective speculation that they are too much. When it emerges from the objective scrutiny of the Taxing Master, one will be able to form a more measured opinion.

Chairman: With great respect I think it is the unanimous view of the House that £1800 per day is too much and even if the Taxing Master settles fees at that much we want to know how he comes to those conclusions. It is totally removed from reality of everyday life in this country and everyday life in other countries even for barristers. It is astonishing that there could even be any implied defence at these level of fees. It goes to show that this whole legal area is removed from the reality of everyday life and does not think itself accountable or does not think it has to relate to normal costs or normal living.

Mr. Russell: Well, the legal profession is certainly more accountable than any other occupation or profession in the country, because if I get a bill from my gynaecologist or my plumber or my motor assessor I will not be able to question that before any independent tribunal whereas if I get a bill from my lawyer I can.

Deputy O’Malley: Would you agree with the proposition, Mr. Russell, since you are so defensive of this fee of £1890 per sitting day and £1000 per day when the Tribunal did not sit, and I can understand the Chairman finding it very high, that while that might be a reasonable fee for a case that lasted a week that it becomes unreal in respect of a tribunal that lasted for 240 days where there must have been 400 or 500 non-sitting days.

Deputy O’Malley: My question was that whereas the fees we are discussing £1890 per sitting day and £1000 per non-sitting day, it might be reasonable for a case that lasted a week that they are a unreal level of fee for such extensive periods as you have just quoted to me of more than 220 sitting days and more than 400 non sitting. Would you agree?

Mr. Russell: If one could get lawyers of the quality that was required to work for less then these fees would be unreal or excessive certainly, but I do not think that is the case, frankly. If I might give an example. In the course of the consideration that the Committee has given to this, I took the opportunity to make some enquiries among barristers to discover what the position was on the ground, so to speak, and one of them provided what I think is a useful insight into this area. He appeared as a very distinguished Junior Counsel at a tribunal, one of the tribunals which has taken place in this State before the Beef Tribunal. It lasted what he thought was a considerable amount of time though of course it was not as long as the Beef Tribunal. None has remotely approached that in length. When he returned to the Bar after the tribunal it was to discover that his practice had totally gone. He no longer had a practice, and as a result of having no income he was obliged to take silk contrary to what he would have wished to do, to become a Senior Counsel. That is the fear which lawyers have of long cases. While they are away doing a case they will lose their practice.

Chairman: Would you accept that the same fears would apply in other jurisdictions?

Mr. Russell: I really do not know enough about other jurisdictions to offer a view on what goes on there.

Chairman: But we do have sufficient evidence to suggest that levels of fees in other jurisdictions notwithstanding the same problems and constraints are a lot less than here. The difficulty which I have with your evidence is that you appear with everything you say to be implicitly justifying these astonishing levels of fees and it suggests a detachment from what is acceptable or real in a just society.

Mr. Russell: Certainly these fees are high and as I have already said as a taxpayer I developed concern about them as the Tribunal continued for the great length of time that it did, but whether the Counsel who had been engaged would have been prepared to agree to the contract being changed I do not know. As I say, if there is a future tribunal every effort will be made to ensure that there is a contractual arrangement which will permit that sort of thing.

Chairman: If Counsel would have agreed to a change in the contract - you told us earlier that there was no contract, that there was never a contract.

Mr. Russell: When I say contract, when I was dealing with Deputy Doherty’s question I thought he meant a written one. There is never a written contract but of course there is an agreement. There is an agreement that Mr. X will act -

Chairman: Can you tell us more about the agreement with the economic and public relations consultants?

Chairman: This is one of the difficulties we have that we know that their level of fees was set at £800 a day at the outset without any consent being sought or got in advance from the Department of Finance, but we also know that their level of fees were re-negotiated downwards not once but twice and maybe three times in one case. What really is burning me up is that the legal profession seem to think that they are beyond accountability and beyond the rules that apply to everybody else. National pay agreements have been renegotiated and there was a contract. The Irish Steel workers and the TEAM Aer Lingus workers know all about renegotiation and it seems the legal profession are above answerability or accountability or detached from these realities of everyday life and it seems that your office are part of this detachment from reality.

Mr. Russell: I would hope not; in other avocations there are unions who can fight the corner of the particular workers involved. In the legal profession every man is his own union, it is a market, he charges according to what the market will bear. If he is charging too much presumably the solicitor will get somebody else so he takes care not to charge too much. That is the normal practice.

Chairman: It is true that it has been engaged in making representations about fees from time to time.

Deputy O’Malley: You made a point of trying to distinguish the Scott Inquiry from the Beef Tribunal and you said that a comparison was not comparing like with like. You went on at length and gave some reasons why it was not comparable. Could I put it to you that some of your reasons have no basis in reality. You said the Scott Inquiry’s terms of reference amounted to 11 lines. What the number of lines has got to do with it, I really do not know. You could say much more in one line than in 11 lines. On the other hand the Beef Tribunal’s terms of reference amounted to 36 pages.

Deputy O’Malley: I wrote it down, the terms of reference for the Beef Tribunal are not as you incorrectly alleged in your evidence to this Committee. The resolution passed by the two Houses which amounts to - I have not got it in front of me, but speaking from recollection - approximately ten or 12 lines.

Mr. Russell: The Chairman of the Beef Tribunal commented on the extremely wide nature of the terms of reference given to him by the Oireachtas. He said that because of the exceptionally wide nature of the terms of reference it was necessary to investigate a very large number of things, and those were set out on 36 pages of the report of which I am sure you have a copy.

Deputy O’Malley: I cannot imagine anything wider than the terms of reference of the Scott Inquiry. It related to the supply of arms and arms making equipment over a long number of years by Britain to other countries, in particular to Iraq and the involvement of successive Governments and various agencies, companies and so on. In addition because the parties and the witnesses were not represented, was there not a much heavier onus and responsibility on the sole Senior Counsel involved and he was apparently paid approximately £600 a day. Was there not a much heavier onus on him because he had to, as it were, seek to represent all points of view and see that injustice was not done?

Mr. Russell: As I have said on a number of occasions one can only compare like with like and it does not seem to me that the Scott Inquiry and the Beef Tribunal are alike.

Deputy O’Malley: They are not because the Scott Inquiry was about far more serious matters than anything contained in the Beef Tribunal in particular from the point of view of Counsel where there was one Senior engaged with two Juniors who were salaried. The onus and responsibility on him was immeasurably greater than it was on any of the 116 lawyers employed here.

Mr. Russell: No doubt it was greater than the responsibility on quite a number of the 116 lawyers but I would emphatically disagree with the proposition that it was less than the responsibility on the legal teams for the Beef Tribunal and for the State.

Deputy Broughan: Is it not true that you are misleading us in relation to this because in the Scott Inquiry the political implications were equally as serious at least in the British political system as the implications of the Beef Tribunal were in our system, in fact they were more serious because there were far more Ministers involved.

Is that not the case? Deputy O’Malley’s point is valid that it was in essence a more serious tribunal. The amounts of money concerned were of relatively equal size nature.

Mr. Russell: In the Beef Tribunal there was a very large number of members of the public and civil servants whose reputations and livelihoods were at issue. I do not believe any one of them would regard the Beef Tribunal as being of less importance than the Scott Inquiry.

Deputy Broughan: The present Chancellor of the Exchequer, Kenneth Clarke, would regard the Scott Inquiry as very important and many senior Conservative politicians -

Chairman: I do not know whether it is worthwhile getting into this. The daily rate is what is important.

Deputy Broughan: Was the Attorney General familiar with making rates because of the fact that he was not a practising member of the Bar? Is it a case that the previous Attorney General and his predecessors and perhaps the new Attorney General as well as running the Office of the Attorney General actually practice something?

Mr. Russell: I do not know whether the present Attorney General proposes to practice or not. He is in office something over a week. Certainly previous Attorney Generals have more often than not practised to the degree permitted by attendance in the office every day of the week.

Deputy Broughan: In a way would the previous Attorney General and other Attorney Generals be in a continuous situation somewhat like Senior and Junior Counsel at the Beef Tribunal in the sense that they were in an ongoing way seconded to public service but they also had access to the legal market at the same time?

Mr. Russell: The point I was trying to make is that the Attorney General is familiar with the market in a manner which no civil servant is.

Deputy Broughan: If that is the case the actual fee which the Attorney General agreed were market rates.

For shorter cases and so on this would be of the order of the kind of fees distinguished barristers would obtain.

Mr. Russell: That is the position as I understand it, that the fees paid to Counsel for the Beef Tribunal were fees fixed in relation to the going rate.

Deputy Broughan: You said that you were concerned as a taxpayer, although we feel that you should have been concerned as a public servant before that, did you not think that the Attorney General and his staff had the unique responsibility because of the complexity of this case and the number of people and livelihoods concerned and the length of time it would run that therefore it was critical that we look again at the fees within weeks, months or days that it was not practical to treat it as another case in the High Court.

Deputy Broughan: Yes, you said that the actual brief was so complex in relation to the Scott inquiry. Did you not think to use the Bar library type of fee on this ongoing basis? It is the level of fees relative to the length of the inquiry that has astounded this Committee and which has made so many of the remarks in reporting to us seem astonishing. Did you not think you had a special responsibility not just as a taxpayer but as one of our senior public servants?

Mr. Russell: The reality is if one engages a person on an open-ended contract - I am using the word “contract” in the sense of an agreement, not in writing - and half way through it one seeks to renegotiate it to one’s own advantage and to the detriment of the other party one is not in a strong position because one is then faced, in the absence of any legal basis, with the hope that the person will agree to take less than you promised to give him. Alternatively he could say if you do not honour your contract and pay me what you promised to pay I will leave. That is unfortunately the problem one has there.

Deputy Broughan: You would say we have learned a unique lesson as a result of this experience.

Deputy Broughan: Would you say that the basic point which we would be concerned with, were we not negligent in the whole area? Was the Attorney General’s Office not grossly negligent in the monitoring of this whole matter?

Mr. Russell: You have asked me a frank question and I will give you a frank answer. The first error was in having terms of reference of the breadth and imprecision of the terms of reference of the beef inquiry. Had they been precisely drawn up the inquiry would have lasted a shorter time and cost less.

Deputy Broughan: Mr. Mullarkey made a point originally in relation to lawyers embarking on this kind tribunal and then losing touch with their ordinary clients. We find that very difficult to accept in relation to, for example, Mr. McGonigal who earned over £1 million or Mr. David Byrne who earned over £500,000. These gentlemen effectively won the Lotto. They were like those lucky people last night who won the Lotto. Do they really care about future practice given the fact that they earned this huge amount of money in such short time? Do they give a damn for the future relative to the fact that they have earned so brilliantly over the period of this Tribunal?

Mr. Mullarkey: I understand the point the Deputy is making. The point I was making was that highly successful Counsel do not like and they do not need long cases. They are in demand elsewhere. They do not like long cases because if they are out of the market for some time they may lose contact with their regular clients. They do not need a case so they can walk away from it if any question arose of renegotiation. It is a difficult point to judge. There would be a much better chance of renegotiation if there was a lower ranking Counsel. With top Counsel my inexpert judgment would be that there is a much lesser prospect of renegotiation there. The experience from places like the UK is that there is a tendency in longish cases for the fee to rise rather than to fall as the case extends.

Deputy Broughan: The fact that these people are so distinguished they would hardly be worried about their future career after this experience. Is the opposite not the case that they are now actually household names?

Mr. Mullarkey: I see the point you are making but equally so they know they are in demand. They might well ask “why should I accept anything less, I can walk out of this case at any minute?”

Deputy Broughan: I asked about a cost benefit analysis of the whole thing. You are saying that it may be possible when all legal costs are determined to actually present us with some sort of a cost benefit analysis of the whole Tribunal. In other words, given the reforms that you have made and the cost controls that you have implemented and the changes in export credit insurance and the likely savings in relation to our exports and the management of the whole beef industry, in effect we would be able to measure to an extent at least the actual benefit to the State of having held the inquiry for the future?

Mr. Mullarkey: What I was stressing there was that the costs were definitely unknown at this juncture. We have pointed to the areas where through tighter administration and stronger powers we would have a stronger hold against evasion. I am not too sure if we really hold out the prospect of quantifying the gain. It is a bit like the black economy, it is an extremely difficult thing to measure what evasion one has prevented. We could be much more forthcoming in due course on the costs of that exercise.

Deputy Rabbitte: We have heard a great deal of discussion in recent days about system failures. Do you think there is a system failure in the Attorney General’s office in respect of this matter of fixing fees?

Deputy Rabbitte: Do you think that a system where the Attorney General, who is drawn in the immediate past from the Bar Council and the Bar Library, ought to be put in a position where he fixes fees for the old boys network? Is it a good system?

Mr. Russell: I do not think the question of the old boys network arises at all. I have never known any Attorney General not to place the public interest first.

Deputy Rabbitte: Well, in this case we are talking about an Attorney General who fixed the fees of the then leader of the State team, Mr. Harry Whelehan. A very short time after that Mr. Whelehan became the Attorney General. It seems there is one club involved if not more than one club. Is it a good idea that any Attorney General should be put into a position where he has to take that responsibility?

Mr. Russell: In default of a better system the answer is that it is the best system.

Deputy Rabbitte: You say you share the concern of the Committee and all parties in the House as a taxpayer but as a public servant and as a lawyer you seem quite complacent about the existing system.

Deputy Rabbitte: You take the view that it is up to us to find out what the better system is and to pass it on to you.

Deputy Rabbitte: As regards the shake up of the Office of the Attorney General and the restructure that we are promised do you think it should include this issue of fixing of fees?

Mr. Russell: I am not in a position to deal with that. Obviously any suggestions that come from any source at any time for improving any system in the Office of the Attorney General would be welcome.

Deputy Rabbitte: What is your opinion as the Senior Legal Assistant and Accounting Officer? Do you think that an eminent shake-up in the Attorney General’s office ought to include this question of the fixing of fees?

Mr. Russell: Any suggestion from any source for a better system on any aspect of the Office’s activities is always welcome, will be carefully considered and if it is good will be adopted.

Deputy Rabbitte: I accept that is a proposition that most of mankind would agree with but in this particular case of the fixing of fees do you think that any revamp of the Attorney General’s Office ought to include looking at this particular question?

Deputy Rabbitte: By not excluding any aspect it means you are including all aspects including this one.

Mr. Rabbitte: I was looking at your evidence to the Committee before including the evidence you gave on the 10th of June. On page 35 when the Chairman asked you: “When the Tribunal is in recess are the daily fees paid whether the Tribunal is sitting or not?” and you answered “no”. Then subsequently you wrote to the Committee on the 13th of July 1993 and you said inter alia “until I read those reports [i.e. reports in the daily newspapers] I had not been aware that Counsel paid by the State were receiving fees in respect of days other than sitting days of the Tribunal”. Is it not a reasonable point to put to you Mr. Russell that you ought to have been so aware and that it is indeed a systems failure if you have wait until you read in the daily press, as the Accounting Officer for the Office of the Attorney General, the fact that although there are twice as many non-sitting days as sitting days that you were under the impression that non-sitting days were not remunerated?

Mr. Russell: As I have pointed out on quite a number of occasions to this Committee - perhaps Deputy Rabbitte you were not present -

Mr. Russell: As I have pointed out on a number of occasions to the Committee, as Accounting Officer I had and have no function whatever in regard to these fees.

Deputy Rabbitte: I do not accept that Mr. Russell. The situation is the Attorney General fixed the fees in consultation with the then leader of the State team, Mr. Harry Whelehan.

Mr. Russell: I am not aware of that, you may be, but I am not aware of that.

Mr. Russell: I am not aware with whom he discussed it. I presume the legal team.

Deputy Rabbitte: What you said was that you did not know what considerations were in the mind of the Attorney General with his favoured lawyer.

Mr. Russell: I did not use the expression “favoured lawyer” at any stage.

Deputy Rabbitte: I am sorry if we have to waste time clearing this up. Presumably he fixed the fees in consultation with somebody.

Deputy Rabbitte: Is it not likely that the Senior Counsel acting for the State team was the person with whom he fixed them? Is that not information that is already in the public domain?

Mr. Russell: I have no doubt whatever that when fixing fees with Counsel he discussed the matter with all the Counsel for the State team. He could hardly reach an agreement with his team if he did not speak to them.

Deputy Rabbitte: Why do you challenge what I say then about Mr. Whelehan who is the Senior Counsel before Mr. Hickey? What is the point of challenging it?

Deputy Rabbitte: May I put the question to you again then? Do you accept that he discussed it with Mr. Whelehan?

Deputy Rabbitte: Fine. Why was it necessary for this Committee to raise this question of non-sitting days? Surely somebody ought to have intervened. Is it not the case that every newspaper that one picked up during that time, every news bulletin that one watched on television, this matter was being discussed? Yet, it was a matter for this Committee to establish whether or not non-sitting days were paid for. Ought somebody not have intervened? Is that not a reasonable question for a member of this Committee to ask?

Mr. Russell: Certainly any question regarding the fees is an appropriate question for this Committee.

Deputy Rabbitte: Mr. Russell, to be honest I am not all that interested in whether you think it is appropriate or not, that is not the question. The question I am asking you is, ought not somebody have intervened before it became a matter to be considered by this Committee?

Deputy Rabbitte: To cause them to be renegotiated, reduced, to even establish that non-sitting days were remunerated.

Mr. Russell: It was not my function as Accounting Officer to involve myself in the question of fees at any stage, in fact, and this is something I have repeatedly made clear to the Committee verbally and in writing. It was not my function as Accounting Officer to do that.

Deputy Rabbitte: You did say that the Attorney General sanctions all fees no matter how great or small.

Mr. Russell: All fees paid by the State to Counsel retained by the Attorney General -

Deputy Rabbitte: Is it never the case that somebody presents a bit of paper before the Attorney General on his desk and says “sanction that for Mr. So and So in respect of the whatever case”. Somebody prepares the documents I presume.

Mr. Russell: No, because they did not come out of the Attorney General’s Vote.

Deputy Rabbitte: Yet in this case although it was, as you say, the longest running tribunal in the history of the State, a very unusual event and all that, despite the fact that the fees dispensed by the Department of Agriculture were on the advice of the Attorney General, nobody ever thought to rein them in, examine them and find out if they were being paid for non-sitting days and so on.

Mr. Russell: I am sure the Accounting Officer for the Vote out of which they were being paid was entirely familiar with every aspect of the payments.

Deputy Rabbitte: Well, I think that goes back to my earlier question about whether the present system is a satisfactory one from the point of view of the taxpayer and the citizen. It is the Attorney General who fixed the scale of fees and not Mr. Dowling of the Department of Agriculture. I do not know if Mr. Dowling was even aware, I do not believe he was aware, that subsequently fees for non-sitting days were agreed. I do not believe that Mr. Dowling was aware of that for some very considerable time after it was done.

Mr. Russell: I do not know. I certainly do not accept that Mr. Dowling was not aware of anything that he should have been aware of.

Deputy Rabbitte: I put it to you, Mr. Russell, that Mr. Dowling was not aware that non-sitting days were being remunerated, that that was a decision arrived at with the Attorney General.

Deputy Rabbitte: Can I put it to you that if you were so aware, what would you think of it?

Mr. Russell: That Counsel were being paid for non-sitting days? Is that the question?

Deputy Rabbitte: No, the question is, if an agreement had been reached with the Attorney General to remunerate non-sitting days and the Accounting Officer out of whose vote it was being paid was unaware of it, what would you think of that situation?

Mr. Russell: Provided he was aware of it when it came to make out payments I would think that there was nothing abnormal about it. I am aware that Counsel were paid very much in arrears throughout the Tribunal.

Deputy Rabbitte: So he ought not to express any concern about it as it is good enough to present the bill to him and ask him to pay it?

Mr. Russell: I am offering no view about the Accounting Officer of the Department of Agriculture because I have no knowledge of his state of knowledge and I am not prepared to speculate.

Deputy Rabbitte: One of the daily newspapers this morning, Mr. Russell, suggested that there ought to be a tribunal of inquiry into what is known as the Smyth Affair. If the House so decides what lessons do you think we have learned from the Beef Tribunal that we might apply in the case of say the Smyth affair if -

Mr. Russell: I am not in a position to deal with any matter other than the legal fees of the Beef Tribunal.

Deputy Rabbitte: I am asking a question about legal fees, Mr. Russell. I am asking you what lessons do you think the Public Accounts Committee, the Dáil ought to draw if there were another inquiry embarked on in the immediate future from our experience of the Beef Tribunal. What advice, as Accounting Officer for the Department that fixes the fees, would you be giving?

Mr. Russell: If the Attorney General’s advice was appropriate in regard to the fixing of fees in any tribunal at any time then he should give that advice and I have no doubt will give it.

Deputy Rabbitte: So you think we should do it precisely as it was done before?

Mr. Russell: If you are speaking - when you say it - of the Attorney General offering his opinion on the appropriate level of fees, if that is what you are speaking of then the answer is “yes”; if the Attorney General is asked for his opinion or if it is appropriate for him to offer it then he should offer it.

Chairman: This was not to get at him being asked his opinion. He decided without consultation with you or anybody else.

Mr. Russell: The question of the relative roles of the Attorney General and the Accounting Officer of the Department of Agriculture has been mentioned on many occasions at the inquiry. The position was that the Accounting Officer of the Department of Agriculture was told the amount of the fees which the Attorney General thought appropriate both for Counsel for the State and for Counsel for the Tribunal. As I understand his position, he took the view that the Attorney General was an expert in this area, that his own knowledge was not equal to that of the Attorney General on the particular issue and he accepted the advice. He may well have thought he had to, I do not know, but he was certainly wise, in my opinion, to accept the advice because it was the best possible advice he could get from the best possible source.

Deputy Rabbitte: Are you concerned that there is no monitoring system in place in the Attorney General’s Office to rein in something like this?

Mr. Russell: It would be inappropriate for an office or Department to interfere in the business, particularly the financial business, of another Department.

Deputy Rabbitte: We have a clear view that it is your view in any event, whatever the view of the Attorney General of the day might be, that even if one possesses this information and one is concerned, as you put it, as a citizen or taxpayer, that it is a matter for another Department and none of your business.

Mr. Russell: I think that fairly represents it. If asked or if it were my duty, I would convey an opinion, but I do not think I saw it as such during the Tribunal.

Deputy Rabbitte: So, in summary, coming towards the end of this investigation by the Committee, as the Accounting Officer for the Office of the Attorney General, you are reasonably satisfied with how the system operates. Is that a fair conclusion?

Mr. Russell: Yes, I have not been told about a better system than the person best qualified to judge the appropriate amount fixing the fee.

Deputy Rabbitte: Do you think the taxpayer and the public generally can have confidence in the Attorney General’s Office?

Deputy Rabbitte: In respect of whatever you like. You are the one who made the statements which, I suggest, will live for some time when you say that the best way of dealing with all matters is the way they are dealt with in the Attorney General’s Office.

Mr. Russell: I do not think I said that. I said the best way of dealing with a matter is the way that appears best until a better one emerges or is seen or is offered to one. I was speaking in the context of fees but I think it is probably of general application.

Chairman: It is now 1.30 p.m. There are so many outstanding questions that I put it to the Committee that we take the unusual step of adjourning for lunch and resuming. I am also anxious that we hear the DPP’s office because it is emerging very clearly and not for the first time, long before the other controversies now in the public eye, that the whole legal area of the State is one area where there are very poor systems and very little regard to costs. It is only right that we should go into this more fully.

Deputy O’Keeffe: Could I suggest that Deputy Rabbitte is completing his questioning. I will not delay this Committee and would urge you to allow us to complete our questioning. I have not been given the opportunity to speak and would like to do so before we break, if that is all right with you.

Chairman: I will accede to the Committee. I will be happy to allow you to question and then decide how we will proceed further. I am very anxious that we do not stop in midstream and I do not think we are going to be able to conclude before lunch. I will allow Deputy Rabbitte to conclude, then Deputy O’Keeffe and then we will decide how to proceed.

Deputy Rabbitte: I wanted to go over some of the history and facts of this, but I accept that Deputy O’Keeffe is like the rest of us sitting here for a long time. Maybe we will all need to reflect on this and in any event might be looking at it in a new circumstance in a couple of weeks time. Can I move to question Mr. Mullarkey or may I indeed put the question first to Mr. Russell? Mr. Mullarkey’s Minister held out the prospect of challenging some of these fees in his contribution to the debate on 1 or 2 September. He was widely reported in that context and specifically he made reference to the element of tax evasion that arose from the Tribunal’s findings. There was wider tax evasion but there was a particular element of £4.1 million and he seemed to hold out the prospect that when it came before the Taxing Master at least that would be a pertinent matter to be taken into consideration. Could you advise us, Mr. Russell, in your experience and opinion, do you believe that the Taxing Master would take that type of matter into account?

Mr. Russell: As I understand it, the Taxing Master’s duty will be to tax the costs in accordance with the order of the Tribunal. In that regard, I believe it would not be permissible for him to approach the taxation of one particular party’s costs as opposed to another on the basis that that person was guilty of misconduct in some area of life. I do not think he has the right to, so to speak, punish people for what they have done in some other area.

When taxation of the costs is being made, all the bills of costs will be subjected to the most rigorous scrutiny, a process which has begun. The State will attempt very vigorously to confine the amounts which the Taxing Master taxes to the minimum.

Chairman: Taxation means to fix the fees, it is an unusual use of the word “taxation”.

Mr. Russell: It is the process before the Taxing Master where in effect the two sides argue the toss in regard to the propriety of the bill and then the Taxing Master adjudicates.

Deputy Rabbitte: When you say that the State will be rigorous or vigorous - I cannot recall which word you used, I am reluctant to say the wrong word - you are merely referring to the taxation system, to the operation of the process, you are not talking about a submission from your Office or from the Department of Finance being heard, are you?

Mr. Russell: I am speaking of the normal taxation process at which the State will be represented, because we will be one of the two parties fighting, if I may use that word, over each bill of costs. The State will be on one side and the party from the Tribunal will be on the other side.

Deputy Rabbitte: The State being the Attorney General’s Office who fixed the fees in the first instance?

Mr. Russell: In the first stage, which is before taxation - as the Committee may or may not know there are a number of stages - the State, I am using that term loosely but in legal terms -

Mr. Russell: The Minister for Finance will be represented by a cost accountant of the costs accounting section of the Chief State Solicitor’s Office and an independent outside expert engaged for this purpose.

Deputy Rabbitte: Where did the primary criterion of the day go, which is knowledge of the market and legal fees? I thought that was the imperative that dictated everything.

Deputy Rabbitte: Why resort to a cost accountant now if lawyers are the depository of all knowledge in this matter?

Mr. Russell: Because we want to make sure that the case advanced by the party looking for the costs is correct and, therefore, it is in the taxpayers’ interest to have somebody there who will make sure that all the arguments proper to the matter be placed before the Taxing Master and all contentions and arguments that, for example, the fees being sought are excessive are put to the Taxing Master by an expert.

Deputy Rabbitte: Mr. Mullarkey, did you consult the Attorney General about the matter of the challenging of the fees and did you take advice from that Office?

Mr. Mullarkey: No, not to my knowledge. I believe the Minister was indicating that in so far as he could arrange it, no stone would be left unturned in terms of a challenging of every bill which appeared before the Taxing Master. An interdepartmental committee is being set up to monitor progress in this area and to work with the specialist legal cost accountant whose job it will be to contest all bills before the Taxing Master.

Mr. Mullarkey: The Departments of Finance and Agriculture, the Attorney General’s Office and the Chief State Solicitor’s Office.

Deputy Rabbitte: Do I understand the situation to be that the State quite properly will be rigorously challenging all this but that the State did not challenge the fees to the State’s own Counsel?

Mr. Mullarkey: It was the State which negotiated the fee. I am not sure what mechanism you have in mind.

Deputy Rabbitte: I am making the point that for all of the other parties before the Tribunal this rigorous assessment system will have to be undergone but we have already paid out the cheques to the State’s own Counsel and there will be no assessment, rigorous or otherwise. This goes back to my point about the system’s failure.

Mr. Mullarkey: I take it that fees were paid. Regarding fees and expenses, I take it that any expenses were vouched for when they were charged to the Vote for the Department of Agriculture and that the fees were in accordance with the agreement reached on behalf of the State.

Deputy Rabbitte: I am sure that is the case and because of the very eminent gentlemen who represented the State I certainly would not suggest that it would not be otherwise, but why subject them to a lesser degree of scrutiny than their eminent colleagues who may I suggest, as Deputy O’Malley did, are equally eminent and of unquestionable probity? Why are they being subjected to this rigorous assessment if the gentlemen representing the State were not so subjected?

Mr. Mullarkey: I imagine the fees which were charged to the Vote of the Department of Agriculture were vouched for as being necessary for the purpose of the Tribunal. The fees were negotiated by the State with Counsel on the premise that they were fair and reasonable fees in all the circumstances.

Deputy Rabbitte: Can you or Mr. Russell tell the Committee where this process is? Is it a concern that we ought have about the next budgetary year or will it be perhaps further into the 1990s?

Mr. Russell: Approximately 20 claims of costs have been received, some of them in the form of drawn up bills of costs, others in the form of letters setting out the claim, and they are being examined by the cost accountants.

Mr. Russell: I do not know. I cannot recall the number of parties to whom costs were awarded but I believe that every party to whom costs were awarded will not neglect to submit their bill.

Deputy O’Keeffe: Having listened to the discussion, I think there is general agreement among us that the fees were monstrous, an acceptance of the public indignation and a certain level of agreement that the system was creamed off. Would it be fair for me to surmise that it was the worst possible example of buck-passing that has ever occurred in the history of the State in that we have the Accounting Officer in the Attorney General’s Office indicating that the level of fees was set by the Attorney General saying that he had no responsibility because it was not coming out of his budget, the Department of Finance is telling us that its only function was to try to depress the charges and costs and the Accounting Officer from the Department of Agriculture is wringing his hands and saying that he is in a catch 22 situation, left with the bills and he has to foot it out of his budget? Could I put it to you in particular, Mr. Russell, that as a responsible public servant even though the money was not coming out of your Department and given that the level of fees was set by the Attorney General, would it not have been too much of us as members of the Committee of Public Accounts to suggest to you that indeed you did have a responsibility to look more accurately at the scale of the fees and the total cost to the State at the end of the day?

Mr. Russell: Let me give a legal answer first; I had no responsibility. But if you ask me as a person who like everyone else has learned lessons from the Tribunal of Inquiry into the Beef Processing Industry, I can say that if there is another inquiry operated under the aegis of another Department’s Vote, I will, at the risk of causing offence to the Accounting Officer of that other Department, offer whatever views I think might be helpful to him.

Deputy O’Keeffe: With regard to the letter you received from the Accounting Officer in the Department of Agriculture, referring back to your letter of 21 July in which you responded that there was no legal base for asking Counsel to return the fees already paid, given the fact that there was indignation here among the members of the Committee of Public Accounts, did you not feel that there was a moral obligation within your own Department to look much more closely at this and that your moral obligation should have suggested to you, even though there was no legal basis for it, that you should have at least, at the behest of the Committee, examined the possibility or indeed requesting those people involved in what we regard as monstrous fees to reduce those costs?

A member of the Committee already has said here that we had reduction in scale in the fees charged by consultants and could we not as members of the Committee of Public Accounts rightfully suggest to you that you would ask those people involved in the legal section, on moral grounds given the public indignation, to reassess the total amount of fees to be accrued from this Tribunal?

Mr. Russell: The approach from the Department of Agriculture came after the hearings of the Tribunal had concluded. The hearings concluded on 15 July 1993 and the approach came on 21 July 1993.

Chairman: May I interject to say there was an earlier approach from this Committee directly to yourself about the possibility of renegotiating fees, is that correct?

Chairman: The record will show that that is the case but we will have it checked.

Mr. Russell: I do not think so, but I will be anxious to hear the date in question. Certainly the Committee made its approach to the Accounting Officer for the relevant Vote on 24 June.

Deputy O’Keeffe: With regards to the costs being lodged, are we going to try to establish an average between the various bills and costs submitted as between the State and the private individuals and companies involved.

Mr. Russell: The establishment of the appropriate level of fees for each individual legal team will be a matter for decision by the Taxing Master. The State will submit at such taxation that fees are excessive if the expertise available to the State suggests that that is the case. In other words if the State believes that if any team is seeking excessive fees, it will urge that upon the Taxing Master and will, if necessary, avail itself of the appeals procedures available.

Chairman: The question before us is not just to do with the costs of legal fees in the Beef Tribunal, it is the cost of legal fees, full stop because if the State is paying high levels of legal fees, it means that private industry and individuals are going to have similar rates. That has a knock-on effect on the costs of industry, the costs of insurance etc. This is a bigger issue than just a tribunal. Nonetheless, it brings into focus in a very negative way the management systems or lack of them in different Departments of State. I want to ask Mr. Russell a few questions about how business is done in the Attorney General’s Office. Is there a management committee in the Attorney General’s Office?

Mr. Russell: The senior officers of the Attorney General’s Office and the Chief State Solicitor’s Office.

Mr. Russell: Three from the Chief State Solicitor’s Office and five from the Attorney General’s Office.

Mr. Russell: No, it has been set up on foot of the strategic initiative which was announced by the Taoiseach earlier this year.

Chairman: No such committee existed at the time of the establishment of the Beef Tribunal?

Chairman: What sort of management arrangement was put in place to keep matters under review as between you as the senior civil servant in the Attorney General’s office and the Attorney General himself? Was there frequent conferences to review progress on matters?

Mr. Russell: There was constant daily contact with the Attorney General but of course you will appreciate that once I had conveyed to the Department of Agriculture the Attorney General’s opinion about the proper amount of the fees, that ended my involvement in the matter.

Chairman: I am trying to get to the root of how the whole area of public expenditure - this is just one that we have come across in recent times - was actually beyond the control of anybody, that once the Attorney General, without reference to any civil servant, without reference to the Department of Finance, could approve public expenditure in a way that no Minister could, without reference to the Dail for a vote. As a former Minister who ran three Departments and knowing exactly what I required of my Department, I want to establish whether there were any systems in the Attorney General’s Office to keep under review salient matters of importance and to see what progress was being made.

Mr. Russell: Certainly the question of fees to Counsel paid for under the Attorney General’s Vote is kept under constant review and is the subject of constant conversations with the Attorney General. In addition the fee sheets which the Attorney General personally inspects and indeed initials to authenticate them are scrutinised going and coming. It would not be appropriate for the Attorney General’s Office to involve itself in the financial affairs of another Department. I do not think there could be any question of the Attorney General’s office seeking to review expenditure in another Department’s Vote.

Mr. Russell: As I have told the Committee many times I do not claim any expertise whatever in this area, it is the Attorney General who possess the expertise in relation to fees.

Chairman: I know we are dealing with this issue now in the context of a much wider public focus on the Attorney General’s Office but the two are related, and that is the question of how the Attorney General’s Office has been run in the past and whether there have been any changes or improvements up to now so that lapses can be avoided. When I asked you the question to which Deputy Rabbitte referred, I asked you the question here on 10 June 1993 whether or not fees were paid for non-sitting days. You replied “no”. I asked you the question three times and you replied “no”. It was only when there was a report in a daily newspaper several weeks later that you wrote to the Committee very promptly to say that you were not aware. We appreciate the expedition with which you did write to the Committee acknowledging that you had unintentionally misled the Committee. The point was that you, as the Accounting Officer and the senior civil servant of the Attorney General’s Office, did not know what were very important cost factors in relation to the Beef Tribunal.

Mr. Russell: Because they were not my concern, because they came from the Vote of another Department. I apologise if this seems slightly bureaucratic but in fact interference by one Accounting Officer in another Accounting Officer’s Vote is not, I think, a good thing and is likely not to produce good results.

Chairman: It is more than bureaucratic, it is a little bit exotic because any reasonable person would believe that the Attorney General’s Office would in the case of any legal tribunal would have a very definite duty to keep under daily review how that tribunal was progressing.

Chairman: Would you be surprised if an overwhelming majority of Members of the Dail thought that that was not the proper stand to take?

Mr. Russell: Well, I do not know what view they would take and obviously it is a matter for them. But if they consider the normal accounting rules they would see the wisdom of each Accounting Officer looking after his own Vote and nobody else’s.

Chairman: I want to go back to the way in which the Attorney General’s Office has been run in the past. The management committee to which you referred, could you give me an approximate date on which that was established?

Mr. Russell: It was thought necessary to grapple with the strategic initiative and to see to what extent it was applicable to the Attorney General’s Office which differs from every other Department in its functions and structures and activities but to see to what extent one could learn useful lessons from it.

Chairman: Prior to the establishment of the management committee can you tell me how you as senior civil servant in the Attorney General’s Office kept overall control of the business of the office and saw to it and satisfied yourself that the business was being handled efficiently.

Mr. Russell: I am sure you are dealing with the legal costs of the Tribunal.

Chairman: The remit of the Committee is wider than that. We are talking about efficiency and effectiveness.

Mr. Russell: Unfortunately, I am only in a position to deal with the matter for which I was called to this Committee which is the legal costs of the Beef Tribunal.

Chairman: We will come to that because we want to deal with your refusal to come before the Committee when you were summoned last time. I want you to answer the question: as the senior civil servant and Accounting Officer of the Office of the Attorney General, what are the normal steps you took before the establishment of this management committee to ensure that the business of the Attorney General’s Office was as efficient as would be reasonably expected.

Mr. Russell: I would need notice on that; they are so many and varied and I suspect that if I omitted any I would later be accused of omitting them deliberately.

Chairman: The Committee will indulge you in this respect, if it could give us a general impression of how things are run in the Attorney General’s Office. What system exists to ensure that issues that reasonable people would consider appropriate to the Attorney General’s Office are being dealt with efficiently by the Office?

Mr. Russell: To be fair to myself, I must ask you to deal only with the matter for which I have been summoned here today. If the Committee wishes to raise this matter on another occasion when I have been given notice I would be happy to deal with it but I cannot enter into detail about matters on which I am unprepared.

Chairman: The business before the Committee today is the business of legal fees of an extraordinary high level which were allowed by the system. We learned very early on that the legal fees were set by the Attorney General. We were told that there was no consultation with you as the senior legal assistant in that office. I am trying to establish whether that is illustrative or typical of the way business is done in the Attorney General’s Office or whether this was an aberration, whether the Attorney General’s Office is run much better than this example would seem to suggest.

Mr. Russell: I would not use the word “aberration”. I do not think that would be an appropriate word. I would say that this matter was unique.

Chairman: I do not suppose there is any sense in my proceeding in trying to highlight the absence of a management committee or systems within your office. Were you aware that many other Departments of State have management committees in place?

Chairman: You are not aware that the Departments had a management committee for a long time.

Mr. Russell: No. I would take the view that each Department must manage its affairs in the way it considers appropriate. If they consider that a management committee is a good idea in their Department at any given time - I have no reason to doubt that they have one - and if they consider it not appropriate I have no doubt they do not have one, but I do not know.

Chairman: An analogous matter is the appointment of economic and public relations consultants to the Tribunal. This Committee has been told by the Accounting Officer in the Department of Agriculture that in the case of economic consultants, they were appointed following a telephone call from the Accounting Officer for the Department of the Taoiseach who was the Secretary of the Department of the Taoiseach at the time, Mr. O hUiginn. On further inquiries we were told that the appointment of PR consultants was done at the initiative of the Attorney General’s Office. Is that correct? What role did the Attorney General’s Office have in the appointment of the PR consultants and the fixing of their fees?

Mr. Russell: I am not in a position to deal with that. I came prepared to deal with the item on the agenda which is the cost of legal fees and I am not in a position to deal with any other matter.

Chairman: Do you not see this matter is connected? Your Office has told us and you have repeated today that it was not possible to renegotiate the legal fees. It is our understanding that your Office was central to the appointment of PR consultants to the Tribunal. The fees for the PR consultants were fixed by somebody and I want to know whether they were fixed by your Office. Those fees we were told were fixed at £1,800 per day, the exact same rate as Counsel for the Tribunal and for the State. Those PR consultants fees were subsequently negotiated downwards by somebody once and perhaps twice. What role did your Office have in relation to the fixing of those fees, the appointment of the consultants, the renegotiation of the fees and depending on those answers to find out why the same process could not be applied to the legal people?

Mr. Russell: I hope I have explained why the fees could not be renegotiated in the case of the legal representatives of the State. I am assuming you are asking me about the legal representation of the State. I do not think I have been asked any question to date about the legal representation of the Tribunal but in regard to the legal representation of the State, I have already explained, I hope, why those fees could not be renegotiated.

Chairman: The question I am asking now is about the PR consultants which is an analogous matter and very pertinent. Is the evidence given to this Committee correct that the PR consultants were appointed at the initiative of the Attorney General’s Office?

Mr. Russell: Because I have not prepared myself for that matter as it is not on the agenda in respect of which I was requested to attend the Committee. Had it been I would hope to have been in a position to deal with it. I recall a previous meeting of the Committee when it seemed that it would come up and I was prepared then. It was on the occasion of the Account.

Chairman: I am going to adjourn the meeting to allow you get that information this afternoon and come back before the Committee.

Mr. Russell: I will not be in a position to deal with it this afternoon because it is an extremely complicated matter and will require a good deal of searching in the files.

Chairman: You told us you came prepared on a previous occasion. Presumably it is very easy to put your hands on those files.

Mr. Russell: No, it takes a very long time to prepare for a meeting of this Committee.

Deputy Broughan: Did you not have a brief on the last occasion? Would you not look for that brief?

Mr. Russell: No, I resent that word. If the Committee had intended to deal with the costs of the non-legal people, I would have expected to be told that it wished to question me on it. I had no reason to anticipate that the Committee would depart from its agenda and embark on other matters.

Chairman: A central part of this issue is the failure or refusal of your Office to attempt to renegotiate the legal fees. We have been told in relation to the PR consultants appointed to the Tribunal that your Office took the initiative in that respect. I want to establish if it is correct that your Office set the daily fees for the PR consultants; if not who did and with whose permission? Who renegotiated down the fees, at whose initiative, and if that example of renegotiating downwards could not have been accepted as a precedent on which to base the possible renegotiation of the legal fees? I am not satisfied that you are as forthcoming as your duty requires you to be with this Committee and I am going to ask you to go back and get such files as are necessary and return here later this afternoon. It is the duty of this Committee to call you and your Office to account, as it is all other Accounting Officers. In respect of offices where there is no Minister to reply to questions in the Dáil we have a particular responsibility to call Accounting Officers because it is the only way Parliament can get accountability.

Mr. Russell: May I draw to your attention once again that these moneys were not payable out of the Vote for which I have responsibility.

Chairman: That is something we may be able to accept but what we want to find out is what was the role of the Attorney General’s Office in the appointment of these PR consultants? You refused the summons of this Committee earlier in the year to come before it to establish the facts in this matter.

Mr. Russell: It is appropriate to recall that the reason why I and a number of other Accounting Officers formed the view that it would be inappropriate to attend was that the Committee or whoever was responsible for the invitation appeared to be embarking on areas of political controversy and were endeavouring to draw civil servants into it. That was why the Accounting Officers concerned felt it necessary to inform the Committee accordingly.

Chairman: That was the judgment which Accounting Officers may have made wrongly. This Committee does not get into policy areas but it will not balk at getting into areas even where there is political controversy if the wrongful or inefficient expenditure of public funds is concerned. It is not for Accounting Officers to refuse to come before this Committee on value judgments. I want to find out exactly why this sequence of events took place; why it was that you refused to come before this Committee on the question which is very analogous and the central topic here today.

Mr. Russell: My reasons were stated in the letter to the Committee which I presume you have.

Chairman: And that is because you did not want to be drawn into political controversy.

Chairman: You will recall that the evidence of the Secretary of the Department of Agriculture, before this Committee was directly contradictory to subsequent replies given by the Taoiseach in the Dáil.

Mr. Russell: Whatever the issue was at the time. I understood that the Committee was attempting to examine a speech made by the Taoiseach with a view to finding fault with it.

Chairman: The Taoiseach replied to questions in Dail Eireann, in reply to questions from Deputy Rabbitte which was in direct conflict with evidence given before this Committee by the Accounting Officer for the Department of Agriculture.

Chairman: It is astonishing because that was the main reason you were sent before this Committee.

Mr. Russell: I have no knowledge of the truth of the assertion you are making.

Mr. Russell: No, you are asserting that the Taoiseach contradicted the Accounting Officer in the Department of Agriculture. I am not in a position to deal with that.

Mr. Russell: I am saying that I am not in a position to deal with this matter today.

Chairman: But you had time to consider this matter before you refused summons of this Committee.

Mr. Russell: I had time to prepare myself for whatever business the Committee wished to discuss and that is why I am not in a position to deal with it today because this is not the business the Committee wished to discuss.

Chairman: The business before the Committee today is the cost of legal fees and the failure to renegotiate these downwards. We have an analogous instance of the PR consultants in which we are told your Office took the initiative.

Mr. Russell: On a previous occasion I was asked questions by the Committee on an area outside my Vote and I made the mistake of attempting to assist the Committee by relying on an imperfect recollection. I have learnt from that mistake and I do not propose to rely on recollection on questions of fact.

Deputy Rabbitte: Could it not be said that it was a matter of duty, rather than a matter of recollection, that you ought to have known that non-sitting days were remunerated? Is that not a reasonable assumption on our part that the Office of the Attorney General and the most senior person there would have been aware of that this deal was done and subsequently imposed on the Department of Agriculture, who had to discharge it?

Mr. Russell: No, it is not reasonable to suppose that I, as Accounting Officer for the Attorney General’s Vote, should have been aware of matters arising on the Vote of another Department.

Deputy Rabbitte: How is the Attorney General’s action accountable to Parliament?

Deputy Rabbitte: You told us earlier - we will have to get the text - in an answer to a question from Deputy O’Malley that virtually everything in the Office of the Attorney General was as perfect as perfect could be. We will find your very words.

Mr. Russell: If my words appear to have made any such assertion, I would be surprised and disappointed to find that because I certainly do not think that in any human institution everything is perfect.

Deputy Rabbitte: We are all on the same human plane. Can I put a question that is troubling me. For example, if the Taxing Master were to find that Counsel for other parties to the Tribunal ought not be remunerated for non-sitting days, would that be sufficient grounds for you seeking to renegotiate the deal done with Counsel for the State that they should be remunerated for non-sitting days?

Mr. Russell: I do not think there is the slightest possibility of any such finding. The suggestion apparently is that lawyers who are asked by their clients to spend a whole day working on the client’s premises, on the client’s papers, advising the client and doing the other normal work of a lawyer, should receive no money whatever for that day’s work. I find that difficult to accept and I believe no member of the public would expect it either.

Deputy Rabbitte: But that is precisely what you told the Chairman on the 10th June.

Deputy Rabbitte: On 10 June, on page 35 you told the Chairman and the question was - “When the Tribunal is in recess, are the daily fees paid, whether the Tribunal is sitting or not”?

Mr. Russell: Because I had not bent my mind to any consideration of how the Tribunal conducted its business because it was no concern of mine, and when I was asked the question, I gave whatever answer I thought was the likely one at the time. I repeat and I have mentioned this matter again in an attempt to draw me into an area where I am not in possession of the facts. I was not in possession of the facts and I should have said so but I attempted to assist the Committee and made an error which I corrected as soon as I discovered the correct position.

Deputy Rabbitte: I absolutely accept that but you seem to be missing the point here. We are talking about the systems for administering the expenditure of public moneys and what you are telling us basically is that it never crossed your mind, that non-sitting days might be remunerated although they were twice as many as the sitting days and that you gave the answer that any of us would give in such a situation and you said, no. Now you are saying to me that it is now a preposterous proposition to even contemplate the notion that people would not be paid for non-sitting days.

Mr. Russell: I was not aware, I imagine. I cannot recall my state of mind then, other than that I answered a question to which I did not know the answer and that was a great mistake. I did not know then - indeed I have not a great deal of knowledge even now - as to how the Tribunal conducted its day to day activities. I had no particular interest in it and I certainly had no involvement in it.

Deputy Rabbitte: Is it not an extraordinary situation, Mr. Russell, and is there any precedent in any other Department of State that the man or office holder who sanctioned these costs apparently takes no further interest in it, is not accountable through any function of the Parliament, and the Department of Agriculture just picks up the tab at the end of the day?

Deputy Rabbitte: Yes, he entered into the contract, he subsequently or rather his successor entered into a further contract to remunerate people for non sitting days and nobody but nobody in the entire public service ever thought that this runaway horse ought to be reined in, to monitor it, no systems, no nothing, and nobody is accountable and now what the Chairman is trying to do through the only mechanism open to the Dáil or open to Parliament is to require you to answer questions to the Committee on this systems failure - if you will forgive me for borrowing a phrase from the Taoiseach.

Mr. Russell: The fixing or payment of Counsel’s fees both for the State and for the Tribunal was not a matter which was the function of the Attorney General’s Office, simply because these moneys did not come out of the Attorney General’s Vote. The payment was a matter for the responsible Department and I suppose I did not possess the intellectual curiosity to busy myself about how other Departments were doing their job but I certainly did not consider it my function to concern myself about how this matter was being dealt with in the Department of Agriculture any more than I would in any other Department.

Deputy Broughan: You are the most senior civil servant in the legal office of the State. Surely you had a duty and a responsibility. You were negligent.

Mr. Russell: No, I was not negligent. I did not see any responsibility on me to interfere in this. Is it being suggested by the Committee - perhaps I have missed some point - that the lawyers should not have been paid for their day’s work.

Chairman: Your job here is to answer questions not to ask them. I am very sorry that you are not answering some very relevant questions and I think it is disingenuous evasion by you of legitimate questions at this Committee on the business of the day. I want to put it to you again in relation to the appointment of PR consultants to the Tribunal, was your Office involved in the appointment of those PR consultants?

Mr. Russell: I am not in a position to deal with facts for which I have not prepared myself and I do not think it would be helpful to the Committee if I were to speculate.

Chairman: Do you know if your Office was involved in the appointment of PR consultants in any way?

Mr. Russell: I believe that this line of questioning is unfair. I cannot deal with matters in respect of which I have not prepared myself and I do not wish to hazard guesses. I did it once before in an effort to help the Committee and that was a mistake. I am not going to make that mistake again. I have explained fully how it was not possible to renegotiate the legal fees.

Chairman: Why was it deemed possible to renegotiate the PR consultants fees and we want to establish what the role of your Office was in that? I have offered to adjourn to allow you time to get the files and come back here later and you say you would not be in a position to do that. This looks like evading this Committee’s duties to call you to account to the Parliament for the affairs of your Office.

Mr. Russell: I am quite prepared to give every assistance to the Committee but I must be given the facility and courtesy of allowing myself to prepare myself. I came here to deal with the matter on the agenda which is legal fees. I am not in a position to deal with any other matter.

Chairman: You did not anticipate that other questions related to the cost of the Beef Tribunal might arise here and you did not prepare yourself?

Mr. Russell: No, I did not prepare myself for anything other than the legal fees.

Deputy O’Malley: The employment of economic consultants is part of the costs incurred by the State in relation to the Tribunal just as the employment for example of medical evidence in a civil case would be part of the costs of the case.

Mr. Russell: I am sure that is the case. If the State engages anybody then it has to pay them.

Deputy O’Malley: Since we are discussing the State’s costs in the Tribunal, why are you seeking to confine your answers only to part of those costs in other words fees paid to lawyers and not taking the costs as a whole?

Mr. Russell: I am looking at item 4 on the agenda which is the item before the Committee at present and the item in respect of which I was asked to attend and it says cost of legal fees. It does not say costs of the State.

Chairman: You narrowly interpreted that as not possibly anticipating questions from this Committee about other costs in the Tribunal.

Deputy O’Malley: I put it to you now Mr. Russell that you are splitting hairs in an effort to be unhelpful to this Committee and to Dáil Éireann on whose behalf this Committee is questioning you.

Mr. Russell: That is an unfair suggestion. I am not attempting to be unhelpful, I am attempting to deal in the best way I can with the questions put to me but I cannot deal with matters about which I am not in a position to help the Committee because I have not prepared myself for them.

Deputy O’Malley: How is it that the Attorney General of the day, Mr. Whelehan, was able to negotiate upwards the legal fees paid to Counsel for the State by paying them substantially more - £1,000 for every non sitting day - and at the same time you claim that he was not able to negotiate downwards the legal fees. What is it that makes upward negotiation legally possible but downward negotiation legally impossible?

Mr. Russell: I am not aware that the Attorney General negotiated fees upwards perhaps you would indicate what -

Deputy O’Malley: He negotiated fees, we were told I think by you among others, additional fees payable in respect of non sitting days. Is that not upwards?

Mr. Russell: No, he negotiated fees for every day’s work whether it was sitting or non-sitting.

Chairman: When, Mr. Murray, the then Attorney General fixed the fees for the Tribunal, he fixed fees of £1,890 per day for sitting days with no fees for non-sitting days. We discovered later - and I did at some cost to myself - that Mr. Whelehan had been the senior of the State team who benefited from that £1,890 per day and had I known that I would not have asked Mr. Whelehan to renegotiate downwards what he had already negotiated for himself. However, we do now know that subsequently Mr. Whelehan added on, gave the additional benefit to lawyers of non-sitting day fees. That was not agreed with Mr. Murray, that was agreed with Mr. Whelehan. Deputy O’Malley is right. Here was a case where Counsel were able to come and renegotiate additional fees for themselves, where as you say it was not possible to renegotiate downwards.

Mr. Russell: It was not possible to renegotiate downwards because you have to achieve the agreement of the other party. I have no doubt if the State had sought to renegotiate the fees upwards they would have achieved the agreement of the other party. That did not arise but in regard to the non- sitting days the position was that Counsel, being required to work all day, wanted to be paid for it. I would not regard that as negotiating fees upwards. I would regard it as the norm that a person is paid for a day’s work.

Chairman: But it was not the norm at the beginning. The non-written contract was amended in their favour but could not be amended against them.

Mr. Russell: I do not know what was the subject matter of the discussions between the Attorney General and Counsel. All I know is what I was directed to inform the Secretary of the Department of Agriculture, Food and Forestry in July 1991 and this I did. I was not privy to any subsequent negotiations that may have taken place.

Deputy Rabbitte: May I ask you, even if you do not agree, if you understand the concern of this Committee that there is an officer holder who may sanction fees on whatever criterion he sanctions the fees and is not accountable to the Dáil. It is a bit unlikely, although not entirely unlikely, that there would be a tribunal of inquiry into the Attorney General’s Office. Therefore, by definition it will involve another Department of State where the fees are fixed by the Attorney General but it is out of the Vote of a different Department of State - the Department of Enterprise and Employment, the Department of Agriculture, Food and Forestry or whatever - and yet the man who fixes it does not have to answer to anyone. You merely pass it on as a messenger to the Accounting Officer of that Department saying: please, are you aware that this has happened, make sure you discharge it quarterly or whatever it is.

Mr. Russell: I readily appreciate and accept that such a position should be a matter of concern because, as Deputy O’Keeffe said, it seems as if the certainty which the Committee has a right to expect did not exist in this case, that is to say the certainty of knowing where the responsibility lay. I accept that. That has been remedied by the new rules the Department of Finance has drawn up. Even without the benefit of that, the particular situation which arose in the Beef Tribunal would not occur again simply because people have learned lessons from it, some of the lessons we have learned at the hands of this Committee. I do not foresee a similar situation arising.

Chairman: I can assure you, Mr. Russell, that it is my impression that you still have many more lessons to learn from this Committee by your refusal and unhelpfulness in questioning today. I am adjourning questioning of you to allow you time to check your files. We are going to bring you back here as soon as may be. We will expect you to have reasonable facts for this Committee. If necessary we will report to the House on our difficulty in establishing facts in our line of questioning with you.

I want to turn now to Mr. Dalton about the role of the Taxing Master. The Taxing Master is described as a quasi judicial-office.

Mr. Dalton: I understand that in the exercise of his functions as Taxing Master, he acts in the same position as a judge of the High Court. In other words, his actions are not questionable by Ministers or anybody else. He is appealable to the High Court and, if necessary, to the Supreme Court.

Chairman: We have a situation where, in this case, lawyers fees are fixed by a lawyer.

Chairman: Just like the Attorney General it is another lawyer fixing fees and is an in-house issue of lawyers. Is there no outside agency or profession involved in assessing these fees?

Chairman: Will the proposal for the Minister to take powers in section 43 of the Courts and Courts Officers Bill give an opportunity to other outside professions to be involved in assessing what is reasonable?

Mr. Dalton: I do not think so. That is not part of the legislation. What emerges in the legislation is a matter for the Legislature. The Bill is a proposal by the Minister for Justice, no more than that, at this stage.

Chairman: In looking at this question, have any comparisons been made with the way legal fees are fixed in other countries?

Mr. Dalton: My understanding is that the Taxing Master system operates in other countries and certainly in England. I do not want to misguide the Committee. From the information which I have gathered about the situation in England and the Scott Inquiry, I believe that the Committee would be unsafe in relying on the Scott Inquiry comparison or on relying on the information you have in relation to Counsel fees in England. I am not asking the Committee to accept what I say in this regard, but I am suggesting that it might be useful for the Committee, before it reaches final conclusions, to get more information about what is happening in England. On the basis of my contacts with senior civil servants in England - and I am not requesting the Committee to accept this but am requesting the Committee to do more research on this issue - the daily fee for Counsel of the kind engaged in the Beef Tribunal is between £2,000 and £5,000 which is quite substantial. I have also heard of fees of £10,000 per day being paid. The brief fee could be much more than the £8,000 paid in the Beef Tribunal. Brief fees of £50,000 are not uncommon for people of that calibre in certain cases. I understand that this is the kind of brief fee that would be payable in a case running three years. The Committee ought not rely on what a gentleman said on radio to Joe Duffy. It might be necessary to do more research.

Chairman: That advice is well taken. We have already written to the Treasury Solicitors and to the Lord Chancellor’s Office in England. You are about the third public servant who has made those suggestions to the Committee. All our research to date has not unearthed any such figures.

Deputy Broughan: On that point, what you are saying is that the market fees in the British Courts of Justice are much higher relative to a tribunal fee whereas in our country what happened, due, we feel to the incompetence and inefficiency of our officers responsible, was that our situation was totally different in that we totally reflected the market fee. In Britain, the Legislature took care that that would not be the case. In other words there was a much lower scale of fees for this type of tribunal with which the English are more familiar.

Mr. Dalton: Again, so as not to misguide the Committee, I could not agree with that. It proceeds on the proposition that the Beef Tribunal is comparable with the Scott Inquiry. I am not going to hang myself out to dry and say you should simply accept what I have to say on this matter. I am saying to look at it further.

The Scott Inquiry was not a statutory inquiry at all. It was not an inquiry conducted under the Tribunals of Inquiry Act. I understand that in England - and I am subject to correction on this - they have abandoned this type of inquiry on the grounds that it is too cumbersome, too awkward and too expensive. The Scott Inquiry was a non-statutory inquiry. It was acknowledged by the Chairman to be an informal inquiry for which we do not have provision here. What we should be looking at now perhaps, is whether we should have a different type of inquiry system. Witnesses could not be called before the Scott Inquiry. They were invited and if they did not want to turn up, they need not turn up. As it happens, they were all the kind of people that would turn up anyway. They were not liable to perjury charges. They could sit there and lie to Scott and nothing would happen in the line of a perjury charge because he had no powers in that regard. I am not sure whether, for the purposes of an inquiry like the Beef Tribunal, anybody would be satisfied with the Scott type inquiry. Having said that, what we ought to be thinking about is whether we should ever again go down the road of using the type of tribunal of inquiry that is provided for in our existing Tribunal of Inquiry Legislation. Is that the way forward? The introduction of a difficult system would open up the possibility of dealing with the number of Counsel involved, the kind of fees paid and so on.

Chairman: Apart from the daily fees paid, the number of lawyers involved, Mr. Russell made point the point that under our Constitution, where people sought to be represented separately they had that right. Did that go so far as to mean that they could have four barristers where perhaps one would have been sufficient?

Mr. Dalton: I would not set out to defend either the fees or the number of Counsel involved in the Beef Tribunal. The point Mr. Russell made is that the fees were very much a market issue and the number of Counsel to the best of my knowledge, was something that lay very much at the discretion of the Chairman of the Tribunal but I am open to correction. Mr. Russell would be better placed to know why the number of Counsel was so large.

Chairman: It is becoming clear to this Committee next on the agenda is the Office of the Director of Public Prosecutions and even at this late hour I want to take that because last year this Committee three times resummoned the Accounting Officer for that Office because we were so dissatisfied with the way that Office is being run - it seems to me that in this whole legal area lawyers have got into a cocoon, they seem to be able to do what they want, charge what they want and not be expected to answer any questions. The Department of Justice has a very large remit to redress this very large area of public concern and I suggest that in your case we adjourn and ask you to come back to us in three months time to let us know what further steps, if any, your Department can take or contemplates taking with a view to breaking this magic circle and getting reasonable - we are not asking that people accept unreasonable - costs. I want to make it clear that while the remit of this Committee is in relation to public expenditure, we see also if the public authorities are prepared to pay a certain level of fees that has knock-on costs for industry which may have other knock-on costs for the State to higher unemployment, etc. I ask you to come back in three months time to tell us what the Department of Justice has done or proposes to do to get this whole area under control. I have no doubt that you will keep in touch with the Department of Finance and that the two Departments will study this together with whatever other Departments are concerned. I suggest to the Committee that in relation to the further question of Mr. Russell on legal fees and associated matters on which we sought replies today, we adjourn until not later than next Thursday or until an earlier time that I may consider possible. Is that agreed?

Deputy Rabbitte: There may be some merit in asking the Accounting Officer for the Department of Agriculture to be available.

Chairman: I am going to take the DPP’s Office for five minutes and then we will adjourn because it is very much related to the issue at stake here today.

MIONTUAIRISC NA FIANAISE

MINUTES OF EVIDENCE

AN COISTE UM CHUNTAIS PHOIBLÍ

COMMITTEE OF PUBLIC ACCOUNTS

Déardaoin 1 Nollaig, 1994

Thursday 1 December, 1994

Mr. John Purcell (An tArd Reachtaire Cuntas agus Ciste) called and examined.

Mr. Phil Ryan, Mr. Jim McCaffrey, Mr. Jim O’Farrell, Mr. Colm Gallagher and Mr. Liam Drain, Dept. of Finance representatives in attendance.

COST OF LEGAL FEES

Mr. Patrick Mullarkey, Secretary, Dept. of Finance, and Mr. Matthew Russell, Senior Legal Assistant, Office of the Attorney General, called and examined.