The Committee met in private session at 10.50 a.m.

Members Present (Deputies)

Deputy J. Mitchell in the Chair.

The committee met in private session at 10 a.m. and in public session at 10.50 a.m.

Mr. J. Purcell (An tÁrd Reachtaire Cuntas agus Ciste) called and examined.

1998 Annual Report of the Comptroller and Auditor General and Appropriation Accounts.
Vote 19 - Office of the Minister for Justice, Equality and Law Reform (Resumed).
Vote 20 - Garda Síochána.
Vote 21 - Prisons.
Vote 22 - Courts.
Vote 23 - Land Registry and Registry of Deeds.
Vote 13 - Office of the Attorney General.
Vote 18 - Office of the Chief State Solicitor.
Vote 14 - Office of the Director of Public Prosecutions.
Vote 2 - Houses of the Oireachtas and the European Parliament.

Mr. S. Aylward (Director General, Irish Prison Service), Ms F. Flanagan (Director General, Office of the Attorney General), Mr. M. Buckley (Chief State Solicitor) and Mr. B. Donoghue (Deputy Director, Office of the Director of Public Prosecutions) called and examined.

Chairman: Today we were due to deal again with the Department of Justice, Equality and Law Reform, together with the Office of the Attorney General and the Office of the Chief State Solicitor. The Secretary General of the Department of Justice, Equality and Law Reform unfortunately cannot be here for good national reasons, so we will not deal in the main with Department of Justice, Equality and Law Reform issues. However, Mr. Seán Aylward, Director General of the Irish Prisons Service, is in attendance so we can deal with paragraph 20, which affects the Prisons Service and also has implications for the Office of the Chief State Solicitor and the Office of the Attorney General. We will then deal with paragraph 14 in addition to the Votes for the Office of the Attorney General and the Office of the Chief State Solicitor.

I welcome Ms Finola Flanagan, Director General of the Office of the Attorney General, to the committee. As this is your first time to attend the committee we will be easy on you. Please introduce your officials.

Ms Flanagan: I am accompanied by Eileen Kehoe, head of administration, Liam O'Daly, the Deputy Director General, Paul Gibney, office manager, Victoria Cahill, executive officer in charge of the finance unit, and Ruth Fitzgerald, a leading adviser in the office.

Chairman: You are all welcome. I also welcome Mr. Buckley, the Chief State Solicitor. As you have attended the committee previously we will not be easy on you. Please introduce your colleagues.

Mr. Buckley: I am accompanied by Mr. Seámus Crowe, head of administration, Mr. Dermot Russell, chief clerk, and Ms Bernie Flynn, executive officer, accounts.

Chairman: You are all welcome. I also welcome the Director of the Office of the Director of Public Prosecutions, Mr. Barry Donoghue. I gather this is your fist time to attend the committee?

Mr. Donoghue: Yes.

Chairman: You are welcome. Please introduce your colleagues.

Mr. Donoghue: I am accompanied by Mr. Joe Mulligan, office manager, and his two assistants, Mr. John Byrne and Ms Maureen Stokes.

Chairman: You are welcome. I also welcome Mr. John Aylward from the Department of Justice, Equality and Law Reform. By whom are you accompanied?

Mr. Aylward: Mr. Ken Bruton, principal officer, Mr. John Kenny, principal officer, and Mr. Máirtín de Burca, principal officer.

Chairman: We have a few of our old friends from the Department of Finance, Mr. Jim O'Farrell, Mr. Howard and Ms Hogan. They are all welcome.

Compensation

In June 1998 the High Court at a sitting in Ennis awarded £796,654 plus costs, against the State in special and general damages on foot of a personal injuries case brought by a former prison office following an accident at work in 1995. At the opening of the trial, the plaintiff made an offer to settle on £300,000, plus costs. However, despite the repeated advice of its senior counsel to accept this offer, the Department refused to concede liability and, on the advice of the Attorney General, responded with its own offer of less than £200,000. The offer was rejected by the plaintiff and the Department conceded liability on the third day of the trial. Following the High Court award the Department and the Attorney General considered an appeal to the Supreme Court but following negotiations between the plaintiff and the Attorney General a settlement of £550,000, plus plaintiff’s costs of £150,182, was agreed in July 1998. As the State costs came to £37,790 the overall cost of this case was £737,972.

The following matters were noted during audit review of the case. The senior counsel for the State had advised on every occasion that he was consulted before and during the trial that, on the basis of the evidence available to him, the court was very likely to find in favour of the plaintiff, damages were likely to be substantial and settlement on the best terms should be considered.

There were no defence witnesses in court who could contradict the plaintiff’s statements on the circumstances of the accident, nor was there any evidence to contradict the charge of negligence on the part of the State. The defence evidence which was available tended to support the plaintiff’s case.

There was no medical evidence available to the defence which could challenge the plaintiff’s evidence in relation to injuries suffered as a result of the accident, or which could challenge his claim for damages. The medical expert retained on behalf of the defence was not present in court. The defence rehabilitation expert, who was present, advised that he could not contradict the plaintiff’s claim that he would never be employed again in any capacity.

Counsel’s initial damages estimate of £150,000 was revised to £300,000 days before trial, but was qualified by his statement that he still did not have any proper information on the plaintiff’s loss of income to date, what he would be earning if still employed, or the capital value of his loss of earnings into the future. He reiterated his advice that the State was likely to lose the case and warned that the Department’s termination of the plaintiff’s employment some nine months previously on grounds of permanent ill health, of which he had just been informed, would have a disastrous effect on damages, particularly his claim for loss of earnings into the future.

The plaintiff’s claim for special damages was based on an actuarial report on loss of income, which, together with the evidence of the plaintiff’s actuary, was accepted by the court as providing the basis for the special damages award of £496,654. An actuarial report was provided for the State just before trial but, according to the senior counsel, it did not differ in any significant way from that of the plaintiff. The defence actuary was not present in court. The senior counsel advised that he did not have and was not given any instruction, information, material or witnesses which would have enabled him to present any challenge in court to the plaintiff’s claim.

The senior counsel concluded that the true extent of the plaintiff’s condition was not appreciated by the Department and the Attorney General’s office.

As it appeared that the failure to prepare adequately for the case, to assess its full implications and to disregard its senior counsel’s repeated advice to settle the case when the opportunity to do so was available resulted in significant additional costs for the State, I sought the views of the Accounting Officers of the Department and of the Attorney General’s office.

The Accounting Officer of the Department of Justice, Equality and Law Reform informed me that though the senior counsel had advised at an early stage that a court was very likely to find in favour of the plaintiff, this was not accepted by the Department as there were areas of concern in relation to some aspects of the case, principally regarding the circumstances of the accident; the attendance by and reports of expert witness were a matter for the Office of the Chief State Solicitor - CSSO; on Thursday,18 June 1998 the Attorney General requested the Chief State Solicitor to obtain a settlement figure from counsel and to see about settling the case. On Monday, 22 June 1998, the Department was advised by the CSSO that counsel said that plaintiff’s counsel was looking for £500,000 but might settle for £300,000. The CSSO also said that the Attorney General was not in favour of settling for £300,000. In the absence of the agreement of the Attorney General it was not open to the Department to agree a settlement; the State’s senior counsel contacted the Department directly on Tuesday, 23 June 1998, the first day of the trial. He said that due to the plaintiff’s condition he would get well in excess of £300,000, possibly £400,000 and that there might be contributory negligence of 25%, but he was not sure. Counsel said that the State would definitely fail on liability. With the agreement of the Attorney General’s office an offer to settle up to £200,000 was made on Wednesday, 24 June 1998. The Attorney General advised, via the CSSO, later that day to concede liability, in order to prevent an escalation of legal costs, thus leaving it to the court to assess damages. At all stages the advice of the CSSO and the Attorney General’s office was followed; it should be noted that the award of the court was considerably in excess of the highest estimate from the State’s counsel. In addition, the counsel’s views on the question of an appeal were not accepted by the Attorney General. By following the advice of the Attorney General a reduction of £246,654 was achieved on the High Court award of £796,654, whereas the counsel’s advice was that a reduction of less than £150,000 was likely.

The Accounting Officer of the Office of the Attorney General stated that: the information about the termination of the plaintiff’s employment on medical grounds and the actuarial and medical reports on the case were only received by his office just before the case commenced. The rehabilitation evidence and the prison governor’s report on the plaintiff and the veracity of his claim only became available on the day of the hearing. The last minute provision of information and the lack of communication from the local State solicitor on how the case was faringmeant that those in a position to sanction a settlement were not up to date with the dramatic escalation in the value put on the case; liability is kept as an issue in a case for tactical reasons. It is the recollection of the Attorney General’s office that it advised the Department via the CSSO on the day before the trial - 22 June 1998 - that liability should be conceded. The advice was given at the same time that an offer of £180,000 was suggested; the time available to settle the case for a sum of £300,000 was brief. The late delivery of information and the lack of communication meant that the Department had only a short time to obtain sanction. This also meant that those responsible for sanctioning a settlement were not aware of the impact the plaintiff’s evidence was having in court. There was no appreciation of why the settlement figure could move so dramatically from £200,000 to£450,000 in the same day; the two areas of difficulty, the late delivery of information by the Department and the failure of the local State solicitor to communicate information, were discussed at a meeting held in the wake of this case which was attended by representatives from the Office of the Attorney General and the CSSO. Proposals were discussed as to how procedures in these two areas could be improved. However, the proposal to establish a claims agency has since been developed.

The deficiencies identified by this case will need to be tackled by the new agency. In particular the agency will need someone with the authority to sanction settlement available at pre-trial consultations and during the hearing of the case to give a speedy response to any settlement proposal. He also stated that: neither the defendants nor the plaintiff in this case appreciated how great an award the judge was prepared to make; the award was based on the favourable impact which the plaintiff made on the court in giving evidence. The impact of a witness in a case is unpredictable and can only be taken into account as the case progresses. In general there is nothing to suggest that a settlement is always more favourable to a defendant than a judge’s evaluation in a case; the medical expert retained on behalf of the State was not present in court and senior counsel did not, as in the opinion of the Office of the Attorney General he should have done, seek instructions as to whether to proceed or to seek an adjournment of the case. The view of the senior counsel on the medical evidence is not shared by the Attorney General’s office; senior counsel’s advice on the offer which should be made was couched in very vague terms which were difficult to act on. Nor was it clear from his advice what new information or evidence had changed so as to alter counsel’s original advice which set a figure of £150,000 as the full value of the case. The difficulty could have been remedied by having someone on the ground at pre-trial consultations who would be aware of all the last minute detail emerging. This is the function of the local State solicitor. Because of the Department’s failure to have someone present in Ennis court and the failure of the local State solicitor to make contact with officials in Dublin it may be understandable why these officials did not understand why the figures were changing so rapidly; it is the opinion of the Office of the Attorney General that the amount in fact awarded by the judge was excessive. This is borne out by the fact the case was settled for much less before the Supreme Court appeal.

Mr. Purcell: As the Chairman said, we are revisiting this paragraph. In it I draw attention to the financial consequences of the mismanagement of a compensation case. The case involved a personal injuries claim brought by a former prison officer following an accident at work in 1995. As I said at the meeting on 2 December last, there appeared to be a lack of co-ordination among those involved in defending the case, that is, the Department, the Attorney General's office, the Chief State Solicitor's office, the local State solicitor and the senior counsel who was engaged. This seemed to result in the late provision of information vital to the State's case, some communication problems, failure to ensure that defence expert witnesses would be in court and failure to appreciate how the case was proceeding. To one degree or other, this all culminated in a situation where the recommended settlement figure was not approved. In the event, this figure turned out to be £250,000 less than that ultimately agreed. The Accounting Officer of the Department of Justice, Equality and Law Reform accepted that there were lapses all round, including in the Department, but stated the previous day that he was not in a position to speak for the others involved in defending the case, hence the gathering here today.

There would be serious implications for the public purse if this case was in any way symptomatic of the general conduct of the State's agents in the defence of personal injury cases against it. In this regard the Accounting Officer from the Department of Justice, Equality and Law Reform told the committee the last day that he was satisfied it was an isolated case of its type.

The committee will note from the paragraph that the Accounting Officer from the Attorney General's office informed me that the difficulties which arose were discussed at a meeting held in the wake of the this case and proposals were discussed as to how certain procedures could be improved. However, it was Mr. Hamilton who pointed out at the time that any such improvements will have to be considered in the context of the proposed new State claims agency which it is intended will be handling this type of case in the future.

Ms Flanagan: Unfortunately, there was a lack of communication between the various parties involved which resulted in, as the Comptroller and Auditor General said, a lack of awareness as to how the case was proceeding in court in Limerick. This resulted in the case going to hearing and the award of more than £796,000. That award was far in excess of the plaintiff's estimation of the case and anyone else's valuation. It was ultimately settled for £550,000.

People take extremely seriously their responsibilities in these matters and the spending of public moneys on these cases. The difficulty was that the information which showed that the case should have been settled at the amount suggested was not in the Attorney General's office on the occasion. I agree this is an isolated case with Secretary General Dalton and in response to it various things have happened. As you are aware, there is a proposal to set up a State claims agency. There is no claims management system in place. That is not the function of the Chief State Solicitor's office or the Attorney General's office. Cases are handled on a litigation basis, but pending the establishment of a State claims agency the Attorney General wrote to the Minister for Finance suggesting that some interim measures should be taken which would avoid this sort of thing happening. He suggested that a claims manager, who is employed currently in the Chief State Solicitor's office, would address the Departments on the steps that should be taken immediately when an incident occurs that might lead to a claim for personal injury or damage to property, such as taking statements or photographs, getting engineers' reports, looking at the safety statement, considering the issue of contributing negligence and so on. If these things were done there would be earlier decision-making and better briefing which would perhaps ultimately lead to earlier settlement and savings to the State.

We have heard from the Department of Finance and there was a meeting of personnel officers in mid-February. The claims manager in the Chief State Solicitor's office will address the personnel officers on these issues to try to develop systems of that kind.

The other item that was suggested by the Attorney General to the Minister was that it would be very helpful - this is something we are keen to have - if an official from the defendant Department attended consultations and court, where necessary, and that person would have authority to take the necessary decisions. This would certainly mean that developments in court would be fully appreciated. This is something that we advise and would be welcome.

In addition, as regards the National Treasury Management Agency (Amendment) Bill to establish the State claims agency, this is being dealt with as a matter of priority in the office. We transmitted a first draft of this Bill to the Department of Finance on 18 January. I made it clear again that legal advisers in our office should, at all stages, consult with counsel and so on if necessary for the handling of cases. There was no consultation in this case between counsel and the adviser in the Attorney General's office.

Mr. Buckley: Obviously this case was discussed at length within the office after it happened. We considered the situation of the witnesses. One of the problems highlighted was that the psychiatrist was not available in court. With professional witnesses it is not usual to serve subpoenas on them unless you have reason to believe they will not turn up and we did not have reason to believe that would happen in this case. He had been phoned twice in the previous week and had agreed that he would be on standby. We did not realise until after the case that he had not appeared. On consideration, I do not think that we should subpoena professional witnesses. They take exception to being subpoenaed and you lose their goodwill. I think this is an isolated case. In my experience I cannot recollect a case like it where the professional agreed to turn up and did not.

Chairman: I do not understand what that has to do with the failure to make a settlement.

Mr. Buckley: His evidence was not available in court and had it been available perhaps we would have been in a better position to defend the case. We could not counteract the evidence of the plaintiff who also had a psychiatrist.

Chairman: You are not persuading me.

Mr. Buckley: I see.

Chairman: I will come back to Mr. Buckley in a few moments. Mr. Aylward, this is a matter for the Department of Justice, Equality and Law Reform. I know you are the legal adviser but you are the client in the case. Have you anything to say about the Department of Justice, Equality and Law Reform's handling of this?

Mr. Aylward: I echo the remarks of the Secretary General the last day to the committee that we have a number of concerns about the way we managed the matter - I am not pointing the finger at anybody. It was a highly unusual claim. Someone claimed they had slipped on a floor, got up, hit their head as they did so, fell again and hit their head off something else. It was an extremely unusual claim. Engineers and people who looked at the setting where this happened, while they acknowledged that the events claimed were not impossible, felt that they were extremely unlikely. We are discussing a claim where the plaintiff claimed he received one injury falling forward and a second one when he fell backwards. It was outside the experience of our engineer that someone would fall backwards and forwards in the same location in the same minute. It really was unusual. That said, however, there were failures on our part.

Looking forward, which is something the committee would expect us to do, the Secretary General undertook to direct me to consider the issue of streamlining civil compensation cases from the point of view of the client, which in this case would be the Prison Service-Department of Justice, Equality and Law Reform. I have undertaken a review of all the civil actions on hand against the prisons, both in our headquarters, which is still situated at the Department of Justice, Equality and Law Reform, and at local level. I have directed that responsibility for the management of civil compensation cases be assigned in the future to a principal officer within the prisons area. That officer, John Kenny, is with me today.

All the cases on hand at Prison Service headquarters have since been reviewed. Every governor has been asked to review all civil compensation cases on hand particular to their institutions and to furnish to headquarters any outstanding documentation, material etc. as a matter of urgency. This review is well advanced.

The review of civil compensation cases on hand at headquarters level has, inter alia, looked at each case with a view to determining its current status and establishing what remains to be done in terms of dealing with outstanding queries, correspondence, documentation etc. At present there are approximately 75 active civil compensation cases against the Prison Service and these are at various stages of processing. All have been accorded appropriate priority ratings and all are being processed. To eliminate the potential for delays in the transfer of documentation between the Chief State Solicitor's office and Prison Service and onto the prison governors, measures have been put in place to enable enclosures to be forwarded on the day of receipt. I have been personally involved in devising some of the manual mechanisms to facilitate this.

Moving forward, the Prison Service has entered the IT era in a major way - an officer from the IT division of the Department of Justice, Equality and Law Reform has been specifically assigned the task of putting in place a case management tracking system for civil compensation cases against the prisons. I expect early progress on this. I have a number of other points to make but that is enough for now.

Deputy Cooper-Flynn: Mr. Dalton stated that there are 75 active cases at present. Am I correct in thinking that until the new procedure was put in place the Attorney General was responsible for approving compensation payments in cases where settlements were made?

Mr. Aylward: I am speaking on behalf of Mr. Dalton who is unavoidably absent. My name is Seán Aylward.

Deputy Cooper-Flynn: I beg your pardon.

Mr. Aylward: The Attorney General's office remains the key legal adviser to the State and State bodies. However, the deficiency I was addressing was one which existed at our end in respect of processing some of the material coming in and going out. That situation and those arrangements remain in place. There were defects and system failures on our side and we are moving to address them. The director general of the Attorney General's office has dealt with the other institutional issue involving the establishment of a State claims agency which would, perhaps, change relationships. While the relationships have not changed, the system failures that emerged in the report of the Comptroller and Auditor General have been addressed in a serious way by me and the staff who report to me.

Deputy Cooper-Flynn: Ms Flanagan stated that the key problem in this case appeared to be a lack of communication. Given that the information required by the Attorney General to enable him to make the proper decision seemed to arrive very late, why would one not adhere to the advice given by one's senior counsel in that instance? The senior counsel was very specific, he stated that he did not have the information or witnesses available to him to present any challenge to the plaintiff's claim. He went on to say that the plaintiff's condition was not appreciated by the Department or the Attorney General. Surely in a case like that, where a senior counsel is being paid to provide expert advice, attempts should have been made to negotiate a settlement. Why did that not happen?

Ms Flanagan: Offers were made. On paper the case was valued at £200,000 and an offer in that region was made. However, as the Deputy said, the prison governor's report and the rehabilitation report did not arrive until very late. The key report was the rehabilitation report which showed that there would be a significant loss of future earnings, a vital element in terms of the award of damages. The value of the case was not appreciated in regard to what was happening in court and, on that basis, it was decided to leave it to the judge to make a decision. It is not necessarily the case that a court will arrive at a decree which is way in excess of the value. It just happened to occur in this case and it was ultimately accepted by all parties that it was far in excess of the value. That is one of the reasons I have reminded people that they should speak directly to counsel if that arises because full understanding of the way a case is progressing can be obtained. Things happen very rapidly in court.

Deputy Cooper-Flynn: If counsel does not contact the office, how are the lines of communication kept open?

Ms Flanagan: Normally communication would be between counsel and the solicitor who, in turn, would then deal with someone in the Attorney General's office in Merrion Street.

Deputy Cooper-Flynn: That is the normal procedure? I would have thought the Attorney General's office would want to hear the advice of senior counsel rather than obtaining it second-hand from the solicitor.

Ms Flanagan: The solicitor would be in court and he or she would be able to do that.

Deputy Cooper-Flynn: It appears that in this instance the State solicitor was not present for some of the pre-trial submissions and they were not able to inform Ms Flanagan's office that the case was quite serious. As matters proceeded over a number of days it seemed to become clear that the case was a great deal more serious than the office understood. The original offer to the plaintiff was "off the wall" when one considers the way the case was progressing. Why was that information not communicated to the office? Where was the local agent of the Attorney General's office?

Ms Flanagan: This case was heard in Limerick and the State solicitor for Limerick dealt with it on behalf of the Chief State Solicitor's office. He was in Limerick and was present for a certain amount of the case. I understand that counsel spoke to the Chief State Solicitor's office directly.

Deputy Cooper-Flynn: At what stage? Did discussions take place every day? What was the level of communication?

Ms Flanagan: I understand that discussions took place every day.

Deputy Cooper-Flynn: There were communications with the Attorney General's office every day with regard to how matters were progressing?

Ms Flanagan: Apparently so, yes.

Deputy Cooper-Flynn: However, nobody seemed to realise the seriousness of the case. Why was that?

Ms Flanagan: This is the difficulty that arose. The Attorney General advised on it based on what he was told, but it was not clear from the information and original advice we received that there were grounds for the case going from a valuation of between £200,000 and £300,000 to £450,000.

Deputy Cooper-Flynn: What information does the Attorney General need to make decisions in this or any other case?

Ms Flanagan: The Attorney General has the information furnished by the Chief State Solicitor's office and other information he might have received. It included, for instance, the rehabilitation report which was not furnished until after the case.

Deputy Cooper-Flynn: Why not?

Ms Flanagan: I understand that part of the reason may have been a delay in the Department of Justice, Equality and Law Reform, which was referred to by Mr. Dalton earlier. I am not sure whether that was the only reason for it but the reports did not come from Limerick and they were dealt with there. That was why it was not appreciated in our office.

Deputy Cooper-Flynn: I cannot imagine what use the rehabilitation report would have had after the case concluded. It would only have value prior to or during the court case. In such a case where it is asserted that an individual will not work again, that information would have been vital in assisting the Attorney General to make his decision.

Ms Flanagan: Yes, I understand that the information we had was that a greater offer was required, more than had been considered before, but we were not aware that it was related to future loss of earnings.

Deputy Cooper-Flynn: Did the office make a greater offer or did it leave it to the judge to make a decision?

Ms Flanagan: It was left to the court at that point.

Deputy Cooper-Flynn: Even though the officer knew that the original offer was not satisfactory, the office still decided to take its chances against the advice of senior counsel?

Ms Flanagan: We decided not to make a greater offer and leave it to the court in the absence of an understanding as to why a greater offer should have been made. That effectively was the reason.

Deputy Cooper-Flynn: Is that normal procedure?

Ms Flanagan: I agree it was not satisfactory. An offer which was acceptable to the plaintiff would have meant that the case would have been settled, we would not have gone through the procedure of having a decree and then a further settlement afterwards. The more communication there is, the better and more effective the attention that can be given to these cases. I agree that all the information should have been with the decision makers who advised the Department and so on.

Deputy Cooper-Flynn: Is this senior counsel often used by the State?

Ms Flanagan: I do not know. I can check and give the Deputy the information.

Deputy Cooper-Flynn: In normal circumstances, would the State settle cases or is it our policy to fight cases? Where a senior counsel is retained on a regular basis, we would value his judgment and go with his decision. In this case a decision was taken without all the information and senior counsel's advice was ignored. I cannot understand why that happened.

Ms Flanagan: I agree it is difficult to understand. The counsel involved is used a certain amount. I can check just how often. We take his opinion into account and we take counsel's views on board. After all, they are employed to fight the case. They have the expertise for which they are employed.

Deputy Cooper-Flynn: Yes.

Ms Flanagan: As I said, there was a hiccup in this case. It was an isolated case and certainly we have made considerable efforts to make sure such a thing does not happen again.

Deputy Cooper-Flynn: Ms Flanagan said that deficiencies identified in this case will be dealt with by the new claims agency. What deficiencies will be addressed?

Ms Flanagan: The claims agency is being established by the Department of Finance and, ultimately, it is a matter for it. The position is that cases are dealt with on the basis of litigation that arises. We are not aware that an incident has occurred until a pre-litigation letter is sent by a plaintiff or the proceedings arise. They are served on the Chief State Solicitor's office. We do not receive notification from the Department or office for which we defend the case that anything has arisen. The litigation is pursued once it has started. The claims management basis is that incidents, when they occur, which might give rise to litigation would be handled from that point and that the important steps, for example, which an insurance company would take when an incident occurs such as witness statements, taking photographs, examining the safety statement, making an assessment of contributory negligence and looking at the scene, would be taken and an assessment would be made. I understand that will be one of the functions of the claims agency which will be established.

Deputy Cooper-Flynn: Will it have any other functions or will that be its main responsibility?

Ms Flanagan: That will be its main responsibility. It will be a unit in the NTMA.

Deputy Cooper-Flynn: The judge awarded £796,000 and then there was an adjustment downwards. Who negotiated that?

Ms Flanagan: It was negotiated on the advice of the Department, the Attorney General and counsel. It was a different counsel. I understand possibly counsel was not free on the day.

Deputy Cooper-Flynn: Was it decided that somebody new was needed on the case?

Ms Flanagan: No.

Chairman: The claims agency was proposed and agreed more than four years ago. Why has it taken so long to establish it?

Ms Flanagan: Again, this is a matter primarily for the Department of Finance.

Chairman: Can the officials tell me what is holding this up?

Mr. Howard: The decision by Government to set up the claims agency in the middle of last July, based upon a memorandum which was submitted to it and a scheme of a Bill setting out various heads that were considered appropriate. That then went to the parliamentary draftsman's office for drafting of the necessary legislation and again, as decided by the Government, that was to be done on a priority basis. We got in the middle of last month a first draft of the sections based on the heads that the Government had decided and we are discussing them with the parliamentary draftsman's office, the NTMA and some other Departments. It is difficult for me on the outside but I hope a final version of the text might be available in the next couple of months.

Chairman: There seems to be no sense of urgency about the Bill. I recall that when I was chairman of the Oireachtas Joint Committee on Finance and General Affairs during the last Dáil, this was raised and it was agreed in principle that there would be a State claims agency. Four years later there is still an enormous number of claims against State agencies, such as local authorities, health boards, VECs, State companies and Departments. What is the annual number of claims against State agencies?

Mr. Howard: There is no central database. There might not be wholly reliable estimates in respect of claims against Government offices and Departments, but there is nothing available in relation to local authorities, health boards, VECs or State boards.

Chairman: Has any study been done of overall claims against the State?

Mr. Howard: The Government intends to set up a claims agency through extending the functions of the NTMA that would manage claims made against Government offices and Departments, community and comprehensive schools and residential centres for young offenders. It will begin its business with that remit. Provision is to be made in the legislation to allow for its operations to be extended to, for instance, local authorities and others. In fairness, local authorities have for many years, as the Chairman is aware, had their own arrangements through Irish Public Bodies Mutual Insurances. They may or may not wish to change that arrangement. Clearly that is something on which a view can only be taken when the claims agency, under the NTMA is up and running and has established some track record in this area.

Chairman: Nonetheless, this committee has long expressed concern about the State's handling of personal injury claims, their escalation and the slowness in dealing with them. It has been represented to us for several years that if the State could settle some of these cases at a much earlier stage, there would be cheaper settlements and costs would be avoided. The case before us is a classic example of how the State does its business badly which costs a fortune. This has cost twice as much as it need have done if somebody of a sufficient rank was able to make a decision to settle. That is the problem. This is only the tip of the iceberg as it is across the panoply of the State. It is costing a fortune. Something more needs to be done quickly. I am surprised to hear there is no study of the costs right across the State. We should ask the Department of Finance to come back to us in three months, the first week in May, with a report of the number of claims against the State, including local authorities, health boards, commercial State bodies and State Departments and agencies, for each of the past five years, the cost of settlements and the legal costs.

Mr. Aylward: If it helps the committee, I have some information on prisons for the past three years which may be of interest.

Chairman: Certainly, yes.

Mr. Aylward: I bring it up because it shows a temporarily encouraging trend which might be of interest.

Chairman: It may be temporary but you hope it is not.

Mr. Aylward: Absolutely, but one is careful not to raise hopes or expectations. In 1997, 48 cases - I am talking about cases processed because sometimes a claim does not move to a court hearing because it is abandoned or whatever - were settled, in 11 cases a court award was made against us and 24 cases were dismissed. I was around during that year, in the position of my colleague, and we tended to try to resist fraudulent claims. As a client, you can push in a certain direction and in the Four Courts, under a lot of pressure, the legal people may feel differently. There is always tension between the client and his legal advisers.

In 1998, the year on which the committee is focusing this morning, 37 cases were settled. There were only eight awards made against us, albeit one of them a high award, which we are talking about today, and seven cases were dismissed. We do not have absolutely final figures for 1999 but the latest figures available to me suggest that 16 cases were settled, eight were awarded against us and eight were dismissed. On costs arising, the total amount paid out by us in relation to claims against us was £883,037 in 1997. In the year under review it was £1.729 million, of which this was a very big component. The latest figure - we do not have an absolutely final out-turn - for 1999 is £699,000. I know this is not the full information to which the Chairman referred. We should furnish what we have.

Chairman: It is one area. We should now ask for that report - that is decided. In the first week of May, the Department of Finance will come back to us with a full report of the entire public sector for the past five years - the total number of claims, the total cases won, settled and dismissed and total awards and costs, as well as what progress has been made in establishing the State claims agency. Are there any other questions on this?

Deputy C. Lenihan: The way the report is framed does not lend itself to interpretation or understanding. I am curious about the meeting held after this claim, where the two areas of difficulty, that is, the late delivery of information by the Department and the failure of the local State solicitor - I presume that is the State solicitor of Limerick county or is there another one for the city-----

Mr. Buckley: It is the State solicitor for Clare.

Deputy C. Lenihan: It refers to Limerick here.

Mr. Buckley: It should be Clare. It was a Clare case and he was attending in Limerick High Court.

Deputy C. Lenihan: What was his explanation for the delays? I would imagine that evidence is vital to any civil proceedings. What was his explanation for the lateness of the delivery to you or whoever was investigating this issue?

Mr. Buckley: His function was only to attend on counsel in court. The work on the case was done in my office. Counsel and the State solicitor were briefed with the information. He attended on counsel and made sure the witnesses were there, that was his role. His explanation of why he did not communicate was that counsel was doing it and did it more regularly than in other cases.

Deputy C. Lenihan: I am not sure. It refers here to two areas of difficulty, the late delivery of information by the Department and the failure of the local State solicitor to communicate information were discussed at a meeting held in the wake of this case, which was attended by a representative of the Attorney General and the CSSO. What information was badly communicated or delayed by the State solicitor for County Clare?

Mr. Buckley: Expected from him was communication about how the case was developing and going. You can tell whether the plaintiff's case is going well or whether they have difficulty. In this case, the case was going well for the plaintiff.

Deputy C. Lenihan: How did he explain why he was not able to communicate, presumably how the case was going, to your office? It is only a phone call away from Dublin - you pick up the phone and say it is not going well for the following reasons.

Mr. Buckley: His explanation was that counsel was doing that. The barristers were doing it from Limerick, to my office.

Deputy C. Lenihan: Were they doing it?

Mr. Buckley: They were, yes.

Deputy C. Lenihan: That is contradictory because then there was not a failure to communicate by the State solicitor because it was occurring. I have a problem with the wording of the report which refers to the failure of the local State solicitor to communicate information. However, you are telling me the State solicitor did not fail to communicate because the information was communicated in any event. There is a contradiction there.

Mr. Buckley: It came but not from the local State solicitor. I do not think it affects the matter. The information did come through.

Deputy C. Lenihan: Whose report is this, is it yours? Perhaps the Comptroller and Auditor General can explain this. It states in black and white that the State solicitor failed to communicate and now we hear he did not fail to communicate.

Mr. Purcell: The normal format of paragraphs is that I set down the facts as I see them and then I give an opportunity to the relevant Accounting Officers to make whatever points they wish in relation to those facts, usually in response to questions put by my office to them by way of an audit query. If one looks at the bottom of page 32, it is clear that statement is attributed to the then Accounting Officer of the Office of the Attorney General. In fairness and in keeping with a long standing tradition, I incorporate those replies in my report to show the position from both sides. However, that is attributable to the then Accounting Officer of the Attorney General's office.

Deputy C. Lenihan: That is presumably Ms Flanagan's view. Who was that?

Ms Flanagan: I am now the Accounting Officer.

Deputy C. Lenihan: I know that, but who was it then?

Ms Flanagan: The Accounting Officer then was James Hamilton, the former Director General.

Deputy C. Lenihan: He stated it was a failure by the State solicitor's in Clare to communicate, but the Chief State Solicitor's office in Dublin said there was no failure to communicate. Is that the position? I am confused. The Attorney General invoked Ms Flanagan's predecessor. The Comptroller and Auditor General states that Ms Flanagan's predecessor was clear that there was a failure on the part of the Chief State Solicitor to pick up the phone, to e-mail or to send a fax.

Chairman: Are you dissenting from Mr. Hamilton's view, Ms Flanagan?

Ms Flanagan: Neither the rehabilitation report nor the prison governor's report came up.

Deputy C. Lenihan: What does Ms Flanagan mean by "never came up"?

Ms Flanagan: They never came up from Ennis where the case was being heard. While counsel-----

Deputy C. Lenihan: Is it true that they never arrived at the court case and that senior counsel did not have access to them?

Ms Flanagan: I think senior counsel did. They arrived late when the case was about to be heard. They were there but they were late. That was one of the reasons full information on the case was not held in the Attorney General's office or in the Chief State Solicitor's office.

Deputy C. Lenihan: Maybe I am stupid. The sequence of events is that the information on the rehabilitation - the state of the prison officer, whether he was bruised or badly injured and whatever the prison governor determined in this unusual case - did not arrive until the day the court case began. Is that correct?

Ms Flanagan: Possibly shortly before the court case began. Sorry, it was the day the court case began.

Deputy C. Lenihan: Was it five minutes, ten minutes, a half hour or two hours?

Ms Flanagan: I am not sure exactly.

Deputy C. Lenihan: Perhaps the other lady might know because she is prompting Ms Flanagan. Does she know was it two hours before the case began?

Ms Fitzgerald: No, I understand that those two reports were received on the day the case came for hearing.

Deputy C. Lenihan: In Limerick?

Ms Fitzgerald: Yes.

Deputy C. Lenihan: Was it two hours before the case began?

Ms Fitzgerald: I do not know.

Deputy C. Lenihan: Is it possible to find out? I would have thought if one did not have vital information such as that, an adjournment would have been sought.

Chairman: Let us bring some clarity into this. Did Mr. Buckley wish to say something more?

Mr. Buckley: If the Deputy wished to phone me, he could find out, perhaps.

Chairman: Sorry?

Mr. Buckley: We could make a phone call to the officer who dealt with it in my office and find out when that information came.

Chairman: Yes, we can revert to it in a few minutes.

Deputy C. Lenihan: It is not really relevant. It is difficult to understand how, in the report of the Comptroller and Auditor General, the local State solicitor failed to communicate yet someone else had. I do not understand. Is it correct that the senior counsel told Ms Flanagan's office that the case was proceeding badly after a day or two?

Ms Flanagan: I understand so, yes. The senior counsel was on the telephone to the Chief State Solicitor's office on that.

Deputy C. Lenihan: On a regular basis of twice a day or something similar?

Ms Flanagan: I am not sure how many times but certainly the counsel did communicate directly.

Chairman: Who was the senior counsel?

Deputy C. Lenihan: So Ms Flanagan's office was under no misunderstanding that this case was proceeding badly?

Ms Flanagan: The difficulty regarding the handling of the case was that, while we had been told the case was going badly, on paper, we did not have the information which would have shown that a seriously larger offer should have been made. In particular, the rehabilitation report, which was the one which arrived late on the day, indicated that there would be a serious future loss of earnings which comprised the bulk of the award.

Deputy C. Lenihan: Returning to what the Comptroller and Auditor General said - feel free to contest what he said because he is only the Comptroller and Auditor General - one factor was the failure of this famous county solicitor in Clare to communicate and the second factor was the delivery of information by the Department. We will ask Mr. Aylward that question. What delivery failure happened there? Is this the report to which Ms Flanagan refers? Is it the report from the prison governor?

Mr. Aylward: Reports and documentation in this case were received in January 1998 and were not acted upon for some months. There were delays and the matter was overlooked. We have put up our hands and said that, from our side, it was a systems failure and we are installing a tracking system. We have put up our hands; we do not point the finger at anyone else. This was a complex case which went very badly for us. We made mistakes and there are possibly lessons for others. As far as we are concerned, we had a systems failure and we admit it. We have acted to put things right.

Chairman: What systems failure?

Mr. Aylward: The systems failure was the failure by an official to pass on documentation in a timely fashion.

Chairman: However, in addition to that, there is the issue Deputies Lenihan and Cooper-Flynn have raised that, when it reached court, it had nothing to do with the Department. The delays occurred or the decisions were made in the Attorney General's office and the Chief State Solicitor's office. Is that right? That did not involve the Department of Justice, Equality and Law Reform.

Mr. Aylward: We would be in dialogue with the Attorney General's office and the Chief State Solicitor's office in such a case. The authorisation for a settlement in every case would have to come from the Attorney General's office.

Chairman: Would you have an official in court keeping an eye on a case such as this?

Mr. Aylward: When we can, we do. It is a small section of two people, a higher executive officer and a clerical officer.

Chairman: So sometimes you do not?

Mr. Aylward: Many times we do not because it is part of a heavily stretched prison operation which is running the prisons.

Chairman: So the client as such is often not in court?

Mr. Aylward: Only in the most exceptional cases is the client in court because of numbers.

Chairman: That is unusual. Most clients would be in court or would have someone there capable of discussing with counsel how the case was going and making decisions about whether a settlement should be made.

Mr. Aylward: It is very much about staff numbers, a matter which is being addressed satisfactorily with the Department of Finance at present. The Prison Service as managed at present is running on a shoestring in terms of staff. I do not point the finger at anyone because we have amicably resolved that with the Department of Finance.

Deputy C. Lenihan: I am curious because something similar to this problem arose in the Sheedy affair in terms of who represents who in court and who is responsible for communicating the information. I am still baffled by the Sheedy affair and am not convinced by any of the answers we received from the legal people and others. In a court case where a rehabilitation report is available to counsel and to the State team, who is responsible for conveying that report to Ms Flanagan's office? It seems that some days it is the solicitor's, other days it is senior counsel's and it might be someone else's another day. Who is responsible for sending that rehabilitation report? Ms Flanagan states that the office for which she is now responsible did not have the report and could not make an evaluation. They could only hear that the case was going badly and against the State but that they could not read the factual basis of the advice they were receiving on the level of damages to the person's future earnings potential. Who was responsible in Limerick on the day for faxing the report or sending it by courier, now that we have many communications tools available?

Ms Flanagan: I would take the view that-----

Deputy C. Lenihan: Ms Flanagan is the manager. Who is responsible?

Ms Flanagan: If new information arrives in the course of a hearing outside Dublin, the State Solicitor should ensure that it gets to Dublin.

Deputy C. Lenihan: So, if the Comptroller and Auditor General and your predecessor are correct, the failure to communicate the paper information is the responsibility of the State solicitor for County Clare? You have turned around a bit.

Ms Flanagan: The State solicitor felt that the necessary communication had been made because counsel was on the telephone to the Chief State Solicitor's office.

Deputy C. Lenihan: But in your view, is it the responsibility of the solicitor for County Clare, who was and should be responsible in this and future cases of this kind, to actually send the legal rehabilitation report to your office so that you can make an evaluation on a settlement?

Ms Flanagan: Certainly it would have been helpful if it had come up.

Deputy C. Lenihan: And it did not?

Ms Flanagan: It did not.

Deputy C. Lenihan: And that is not the senior counsel's fault but the fault of the solicitor?

Ms Flanagan: No, the senior counsel would not have a function in doing that. The solicitor felt that the necessary communication had been made.

Deputy C. Lenihan: The solicitor felt he had?

Ms Flanagan: He felt that counsel had communicated the necessary information in conversation with the Chief State Solicitor's office.

Deputy C. Lenihan: So the solicitor felt he did his duty but your office felt he did not, obviously? Sorry, your predecessor did not. You take a different view on this.

Ms Flanagan: No, I do not necessarily take a different view. Certainly if all the reports had come to Dublin it is possible that this would not have happened. Things happen very quickly and there would have been a different appreciation. As it turned out, we acted on the information and reports we had which did not include those reports. It was felt that the matter would be left to the court to decide the issue of damages.

Deputy C. Lenihan: Does the responsibility now rest with the Chief State Solicitor to communicate the information back to your office?

Ms Flanagan: Yes, if there is information to be communicated back, it is the responsibility of the local State solicitor.

Deputy Bell: It is obvious, and it has been admitted, that there was a faux pas in this case. However, the question is much broader. We now find a lot of criticism from courts, practitioners and the general public concerning the lack of co-ordination in the processing of cases by the State, the provision of documentation on time and so on. Such comments have become regular and public representatives receive an enormous number of complaints about the way cases are handled.

I would like to ask Mr. Buckley about the letter to the Chairman following the recommendations and the examination of the Doolittle report which was accepted by Government in 1996. That report identified the lack of management structures, resources, staff and so on. That was 1996 and four years later we receive a detailed letter from Mr. Buckley which clearly identifies a lack of staff and facilities in the offices, staff working substantial amounts of overtime, weekends and so on. I do not see how the functions of State can operate if that is the case, and I have no doubt it is. It is no wonder that the operation of the State's legal functions cannot work. Every sector in the Department is inadequately staffed at high level. Have restrictions been imposed by the Department of Finance on staff recruitment? Is it because the level of remuneration in the public service is so miserable in many respects that you cannot get qualified staff or is it due to a delay in the training and recruitment of staff?

Mr. Buckley: There is a limit on the number of staff that can be recruited by the office. However, there is another difficulty which the Deputy has identified and that is that levels of pay are not sufficient to attract people. Because of the economy, levels of pay in the private sector are far in advance of what we can pay. We get people in, they stay for about a year and then they leave when they are trained. They get a lot more money when they go. From my perspective it is soul destroying to see good staff that one has trained leaving. People are working at weekends, on Sundays and at night. My overtime bill only goes as far as HEO level but it shows that a huge amount of overtime is being worked.

Deputy Bell: Do you accept the fact that if this was a business it would be closed down? One could not operate an industry on the basis of what is contained in this report.

Mr. Buckley: I am sure we would be close to it.

Chairman: Has the Department of Finance a copy?

Deputy Bell: May I ask some of the other directors to comment because I think this is the nub of the problem? One of them referred to it indirectly in relation to the case we are discussing. I would like to hear their comments.

Chairman: Has the Department of Finance a copy of this letter from the Chief State Solicitor to me?

Mr. Buckley: Yes.

Chairman: Would you like to comment on it, Mr. Howard?

Mr. Howard: That, I presume, is a letter written roughly 12 months ago.

Chairman: Yes, 5 February 1999.

Mr. Howard: We have a copy, yes.

Chairman: Have there been any developments since then?

Mr. Howard: A number of formal requests have been made to us by the Chief State Solicitor subsequent to that communication. I am subject to correction but on only one occasion since then we agreed to a number of contract solicitors - three I think - employed on two year contracts to handle a particularly enormous claim arising out of a fire in a meat factory where intervention beef had been stored. I think that was the only occasion.

Chairman: In other words, Mr. Buckley, the situation has not changed much since 5 February when you wrote the letter.

Mr. Buckley: I think it has got worse.

Chairman: Would you like to elaborate?

Mr. Buckley: The case referred to by Mr. Howard was being handled in the office by one senior solicitor with what help he could get from the other people in the section. I was offered three recruit solicitors to help him on that case. From my experience they would probably have stayed a few months and then gone to better things and I would have had to start again and get some other recruits who would have to read themselves into the file with consequent delays. It was resolved to pass that case to private solicitors to deal with. It is a huge case. There are ten actions involving the same cause and I am told that there are seven solicitors and nine support staff dealing with that body of work. The same body of work was being dealt with in my office by one person who almost worked himself into the ground. That is the type of problem. Solicitors' firms in private practice put in teams to deal with such cases. I just do not have those resources.

Chairman: So the State is at a big disadvantage in cases?

Mr. Buckley: It is indeed.

Chairman: Mr. Howard, do you want to comment?

Mr. Howard: Towards the middle of last year, a working group reported to Government on the idea of establishing a single prosecution service. One of the group's recommendations, which was accepted by Government, was that the criminal division of the Chief State Solicitor's office should move to the Director of Public Prosecutions and that responsibility for local State solicitors - the county solicitors - should similarly move.

Chairman: Move to where?

Mr. Howard: To the DPP. Arising out of that we have a working group representative of the three law offices and ourselves to deal with the practical implementation of moving the criminal division to the DPP. There are 55 people in that section currently, not including typists who are in a common pool. We are also looking at the implications of that move for what is left of the Office of the Chief State Solicitor and also bearing in mind the implications for that office of the establishment of the State claims agency. Looking ahead one could argue that the Office of the Chief State Solicitor will be far different in a few years times. We accept there will be, for one reason or another, a need for additional staff in the DDP's office with the move of the criminal section from the Office of the Chief State Solicitor, and perhaps back home at the ranch in what is left of the Office of the Chief State Solicitor. We have come to no conclusions on that as yet but we are pursuing it actively.

Chairman: The criminal element is about one-third of the business and the civil is about two-thirds. What are the benefits in moving the criminal element? Will we get a better criminal service? Why would we get a better criminal service in such circumstances?

Mr. Howard: This room, I think it is fair to say, is full of people who are much better qualified than I to respond to that question.

Chairman: Hands up anyone who thinks it is a good idea? This sounds like moving around the deck chairs on the Titanic; there is no great advantage to anybody that I can see. Mr. Buckley, what is your view?

Mr. Buckley: I consider it to be a good idea because where you have two major clients there is always a tension between one and the other, you are trying to rob Peter to pay Paul and vice versa, whereas if we deal only with civil work I think we will be more focused and give a better service. However, we need resources to do that.

Deputy Bell: Does the gentleman from the Department of Finance agree that it is a false economy to restrict the level of staff, equipment and whatever is required for the elements and organs of State to carry out their functions efficiently? As the report says, they require large amounts of overtime in terms of working with exhausted staff. That is a pretty dim picture which does not create confidence in those arms of the State. If this is controlled by the Department of Finance then we should be talking to it to find out if it is aware of this mess.

Chairman: We have the letter since last February. Many people are working overtime without pay and that must be a big spur to move elsewhere where they can get paid - and this is apart from being over-stretched. I know the Department of Finance has a procession of obligations for more and more staff, which is not always the answer. On the other hand, if the lack of staff can be shown to be costing us money then it is clear that something needs to be done about it.

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