Saturday, July 31, 2010

Laws governing Irish building societies must be changed

The report published by the  National Institute for Regional and Spatial Analysis (NIRSA),  A Haunted Landscape: Housing and Ghost Estates in Post-Celtic Tiger Ireland was described in the media  as 'a scathing and unambiguous attacks on the role of politicians' in the housing debacle.  The report highlights how ludicrous fiscal policy and reckless planning decisions resulted in thousands of uninhabited and unwanted, exorbitantly priced, houses being built in hundreds of estates at undesired, remote and poorly serviced locations across the country.  It is a pity that the report did not also shine a tangential bright light on the toxic and corrosive impact of building societies, driven by the legislation governing them.

When environment minister, Pádraig Flynn, was steering the Building Societies Bill 1989 through the Oireachtas in February of that year he said that it would ‘set very few boundaries to the future and scope of societies’. This included the empowering of building societies to acquire, hold, dispose of and develop land where the land is used for commercial purposes – other than residential.

The Bill was welcomed by Fine Gael spokesman Alan Shatter with an exclamation that Irish building societies 'must not be constrained by legislation enacted for a different time'.  It was also welcomed by Ruari Quinn and the Labour Party although he expressed reservations about their capacity to compete in financial services and a desire that the historical role of the building societies would be retained..  Building societies were granted virtually unlimited freedom to act like banks and their attempts to do so subsequently imploded in abject failure.

There were 23 building societies in existence when the State was founded. There were 10 in existence when this legislation was passed. The savings of their 1.25 million members’ at that time was equivalent to 20% of all savings in the country. More than six of every ten persons who financed the purchase of their own home in the late 1980’s did so by means of a loan from a building society.  Two failed building societies remain in existence, courtesy of NAMA and the taxpayer.

But there is a thriving, if more rationalised, building society sector in Britain. The 50 building societies there have deposits of £220 billion, accounting for almost 22% of all deposits. These finance residential mortgages of £225 billion, about 19% of the total residential mortgages outstanding. Apart from offering their members better value than banks, British building societies must not raise more than 50% of their funds from wholesale markets, but the average proportion raised from this source is actually closer to 30%.

The scale and success of the credit union movement in Ireland reflects a strong appetite for community-focused savings and loan institutions with mutual status. Should the inquest into the demise of our housing sector not also include a recommendation for revised legislation that ensures building societies stick to their fundamental mission of making loans that are secured on residential property funded substantially by their own members

How else can the young families of the future avoid being trapped in unfinished estates bearing burdensome loan liabilities on terms that are utterly unsustainable, even in a recovered economy?

Friday, July 30, 2010

TOP of the TOTS : Most Popular Baby Names in Ireland - 2009


  Boys Girls
1 Jack Sophie
2 Seán Ava
3 Daniel Emma
4 Conor Sarah
5 James Grace
6 Ryan Emily
7 Adam Katie
8 Michael Lucy
9 Alex Aoife
10 Luke Chloe



  Boys Girls
1 Jack Katie
2 Matthew Sophie
3 Daniel = James Grace
4   Lucy
5 Ryan Erin
6 Adam Emily
7 Ethan Emma
8 Charlie Eva
9 Thomas Chloe
10 Conor Anna

Wednesday, July 28, 2010

Brian Lenihan’s illness, John Crown and TV3

It was on the News @ 5.30 on St Stephen’s Day 2009 that TV3 broadcast that Brian Lenihan was seriously ill.   This report, included a contribution by the distinguished cancer specialist, John Crown, in which he described his expert knowledge of pancreatic cancer, including the implications of both timely and untimely diagnosis.

The report prompted a considerable number of complaints to the Broadcasting Authority of Ireland, including one from me.  The Authority issued a finding on 9 March 2010 that this broadcast was within the requirements of the fairness, objectivity and impartiality rule, as defined by the Broadcasting Act 2009.    The Authority found on viewing the report that the reference to the type of cancer was editorially justified and in the public interest. 

But the Authority also found that the content of the report could have been considered by some viewers as distressful and / or offensive. TV3 stated that it is solely responsible for its decision to broadcast the news report, including the timing and the manner of the report and TV3 acknowledged that its news bulletin caused genuine upset.

I wish to retract my criticism of Mr Crown’s contribution to the report and express regret for any personal offence, or hurt, that he might have felt as a consequence of my criticism.

Elect the HSE chief!

The change of leadership at the HSE ought to have prompted a radical, far-sighted overhaul of its accountability, if the Government was really putting the interests of citizens first. 

The scale and complexity of the HSE is such that it functions like one of the major metropolitan cities of the world. The role of chief and deputy chief executive of the HSE is comparable to that of the mayor and deputy mayor of a major city, like London, Paris, Rome, Istanbul or Moscow. 

The HSE’s enormous budget (€15 billion) is significantly greater than the combined budgets of the city councils of Boston, Chicago and Los Angeles. The salary of its incoming chief executive outstrips the combined salaries of the executive mayors of Chicago and Los Angeles, who oversee the needs of a population of over 6.6 million people.

The mayor who leads these huge cities faces the electorate every four years. The responsiveness of these mayors to the needs of the public is dynamic, focused and robust. Indifferent standards of hygiene, premature deaths as a consequence of an MRSA infection, botched operations, or prolonged delays in accident and emergency departments are unlikely to feature in the manifesto of a successful candidate seeking election nationally to run a health service system - anywhere in the world.

The board of the HSE could continue to be appointed by the Minister for Health and Children.  But we, the people, need to feel we can strongly influence the system directly. Would the citizens of Boston, Chicago and Los Angeles feel short-changed if an anonymous apparatchik, chosen by unelected individuals, who are strangers to the public at large, were to emerge as leader of their city, spending their taxes? This issue is not one of promptly dealing with snow clearance from footpaths, policing or the consequences of devastating flooding, but it concerns matters that have a direct and immediate impact on living and dying.

Is it not reasonable, therefore, to want some say in who is in charge and to fire them if they fail?  Such an initiative would redefine the relevance and value of social partnership in Ireland.

Saturday, July 24, 2010

NAMA and the Irish hotel industry

2009 09 01_0374_edited-1 I am cringing with horror and revulsion at the report in the Irish Independent on Friday, 23 July that Mary Hanafin TD, Minister for Tourism, Culture and Sport is to meet NAMA to discuss ‘the problems’ in the hotel industry.  Their industry spokesmen concurrently attempt to blackmail and browbeat the citizens of Ireland by telling us that their demands to eliminate unwanted capacity  would cost less than the welfare costs in the event of the subsequent, but inevitable, meltdown of this industry.  She must not cave in to this delinquent posse and they must endure the total impact of the unmitigated consequences of their own decisions.  You must especially stamp on their demand that those who benefited from €1 billion in tax foregone should be let off the hook in meeting all obligations and conditions attaching to this.  Jimmy Deenihan, the Fine Gael spokesman on tourism is quoted in the article as saying – you “must show leadership” and so must he.

Public confidence in the NAMA enterprise is sceptical and uncertain, at best, and if it is demonstrated that NAMA is prone to heavy-handed political manipulation at the highest level the public will be extremely distressed and angry.

Hoteliers exist in a capitalist system which functions on the basis of risk and reward, as is the case with our economy as a whole.  Nobody forced them to increase capacity by 18,000 rooms since 2003 and this reckless expansion occurred without any commercial rationale, or informed foresight,  whatsoever to justify it.  The hotel industry had already expanded by 60% between 1997 and 2003 at a cost to the taxpayer of €140 million in taxes foregone.  This vested interest was therefore totally indifferent to risk and acted as though the only price on risk is that paid by the State with our money.

They also have the audacity to demand a State-sponsored ‘high-level’ committee to gerrymander their industry by selecting which hotels would be eliminated and which would be maintained for strategic posterity, featherbedded, of course, by impoverished and stressed taxpayers who have contributed €1 billion in taxes foregone since 2003 to create massive unwanted capacity.  

While the EU Commission approved the accelerated capital (depreciation) tax allowances as a legitimate State aid on 23 December 2002, Commissioner Monti did point out that “the Commission regrets that Ireland put the aid in question into effect, in breach of Article (88)3 of the Treaty.”

When hoteliers successfully lobbied the Department of Finance they argued that these very generous tax allowances would induce speculators (should I have said investors?) to build hotels at regional locations where there had never been a hotel before - and which saw very few customers subsequently.  When the EU Commission wanted these allowances guillotined on 31 July 2006 the Department of Finance persuaded the Commission to extend them to 31 July 2008 on a tapering-out basis  “because there was a very large backlog of pipeline projects and the rush to complete construction would inevitably lead to short-term overheating of the Irish construction sector” – not because the State aid was yielding positive results in the form of viable sector at remote regional locations.

The hotel industry speaks of the importance of its economic contribution to the State.  A critical illustration of economic stature is money in the bank.  Central Bank data indicates that hotels and restaurants increased their bank deposits since 2003 by only  €115 million to a total of €655 million in 2010 – less than one third of 1% of the total deposits in banks by Irish residents.  That is equivalent to less than €9,000 for each of the industry's 60,122 rooms.  But the very prudent and far-sighted Irish banks lent the industry €4 billion since 2003 to build the unwanted capacity and the average indebtedness in respect of each of the unwanted rooms is now over €350,000.  The tourist industry as whole owes the Irish banks over €10.9 billion - €1 for every unit of integrity and intelligence quotient that exists in the top-level of our banks.

The hotel industry lobbyists hum like choir boys about the €10 departure tax as though it was a red-hot poker impediment to their prosperity.  Their cute-hoor mentality, of course, precludes any suggestion as to who will provide the revenue were this tax to be eliminated.  The old-age pensioners and the infirm would bear the burden, I presume.  I suppose their next melodic aria will be to lobby the relevant authorities to increase the UK minimum wage from £5.80 per hour and the US minimum wage from $8 per hour to enhance the prospects of filling their bedrooms and meeting the exorbitant charges from time to time – ‘because these markets are so important’.

The hotel industry is the author of its own catastrophe havoc with the connivance of the State, the EU Commission and its ever-friendly bankers.  They tell us that it will recover in five years if it is kept breathing through one nostril with relief from local authority rates and additional large dollops of cash from our national debt.  Recovery of the incumbent regime is a most unlikely prospect and there is certainly no evidence to support a 5-year time frame.

The vacuum that is created by the destruction of this industry will be filled in due course by a new generation of hoteliers whose understanding of capitalism, providence and insight will hopefully be better honed that the current generation of losers and the Minister of the day might even have the possibility of presiding over an industry that is viable and functional while NAMA will have reached the geriatric stage of its natural life uncorrupted by political meddling.

Saturday, July 17, 2010

Cowen needs to mobilise public opinion on expenditure cuts

Brian Cowen needs to successfully mobilise public opinion if the exchequer deficit is to be tackled and the shoots of economic stability are to yield jobs, stability and opportunity.

During the first six months of 2010 our national debt has increased by €9 billion and the amount of interest paid on it has increased by 20% between June 2009 and June 2010. Interest now accounts for over 15% of all tax revenue, up from 11.5% a year earlier. When the State had tax revenue of almost €46 billion in 2006 the government spent €44 billion. This year spending will be in the region of €60 billion but taxes could be as low as €31 billion.

The Finance Minister has indicated that serious expenditure cuts can be anticipated in the next Budget if the exchequer deficit is to be tackled in a meaningful way – and it must. But in the run up to the Budget the media will be cluttered with a cacophony of special, frequently vacuous, pleadings of vested interests seeking to defend their own resources typically citing some really heart-rending testimonials as a defence that are often quite atypical. Furthermore, the availability of the resources many of them will speak of are of relatively recent origin given the explosive and often wholly indiscriminate growth in government spending as was demonstrated vividly, for example, in FÁS and the HSE; when paying off delinquent executives in public institutions and the banks and building societies now controlled by the State and spending commitments based on benchmarks that are obsolete, or unsustainable.

If this government was not so snookered by a bunker mentality they would mobilise support through the public identifying spending cut suggestions rather than relying exclusively on the observations and advice of An Bórd Snip.

Would the Taoiseach’s much criticised capacity to communicate not be somewhat remediated if his own Department’s web site included an e-mail 'have-your-say' input facility for a finite annual 60-day period for the public to make practical suggestions that would save public money? These could be coordinated by an identified champion and criticised by interested members of the public before being presented to ministers for consideration. The cost of gathering suggestions need not be too burdensome, nor the electronic administration too onerous in the context of there now being fewer human resources in the public service working for less money.

Practical suggestions, illustrated by specific application in given instances, such as saving electricity, saving money through recycling, less travel and greater use of conference calling and video conferencing technology, less spending on contractors and consultants, using more efficient double-sided printing, greater sharing of resources, tighter rules on sick leave, more critical evaluation of discretionary spending, and more economical computer costs are examples of what might emerge. The compacting, postponing or elimination of certain academic programmes could also stretch educational resources and redefine priorities.  A critical review of publically funded advertising expenditure ought to enhance its relevance, focus, impact and practicality.

Apart from the practical benefits that might emerge from such an initiative, surely it would enhance the overall process of governance by a regime headed by a Taoiseach who does not yet have the reassurance of his own electoral mandate and who seems increasingly shy of connecting to the electorate by holding three long overdue by-elections well ahead of the next Budget.  He would be seen to be directly and robustly engaging with the general public on a matter which needs their widespread support and commitment, rather than merely consorting with the 'shakers and movers'. 

President Obama successfully mobilised public opinion in 2008 through the slogan ‘yes, we can’. This is an opportunity for Brian Cowen to emulate his approach through 'have your say'. It might also severely discourage his party colleagues from threatening to replace him with someone else who has not earned a mandate from the electorate to serve as Taoiseach and who would therefore be devoid of political capital and street credibility.

Thursday, July 15, 2010

Will credit really start to flow to Irish SME’s?

Finance Minister Brian Lenihan has published and SME Lending Plan from AIB and Bank of Ireland in which each of them indicate an intention of making €3 billion available to SME’s in 2010/11

Which customers are likely to be in a position to use such additional resources and what impact will the provision of these facilities have on lenders? Borrowers that qualify are supposed to be exporting firms. .

An SME employs fewer than 250 persons; have a turnover of less than €50 million and a balance sheet less than €43 million.

Total lending to SME’s at 31 December 2009 amounted to €32.28 billion

€ Million





Finance and Leasing


Invoice Discounting




This proposal indicates a potential 19% increase in credit availability

There were 33,192 applications for credit amounting to €1.854 billion in the fourth quarter of 2009; 131,500 for all of 2009. Credit applications for the fourth quarter of 2008 amounted to €2.892 billion. The approval rate is estimated to be 84%. The utilisation rate for overdrafts is 52%.

Profile of Credit Applications


Number of Applications
Q4 2009

Amount Sought

€ Million

Total Borrowing

Agriculture and Forestry








Mining and quarrying








Electricity, Gas and Water




Construction supply




Wholesale and repair




Hotels and restaurants




Transport, storage and communications




Financial intermediation




Real estate and business activities




Health and social work




Other community and personal services








Each of these sectors has issues from a banking perspective which I will comment on in the context of the change in their overall borrowing profile between December 2005 and December 2009

Credit Trends 2005 – 2010

Resident non-government credit, excluding personal borrowing, residential mortgages and lending to the educational sector increased by 121% in this five-year period.

The following table summarises the change in each sector and the relationship between the deposits maintained in each sector and how these relate to borrowing by these sectors as a whole:


Change in borrowing

Dec 2005 – 09
€ Million


Dec 2009

Resident Credit

Dec 2009

Agriculture and Forestry








Mining and quarrying








Electricity, Gas and Water








Wholesale and repair




Hotels and restaurants




Transport, storage and communications




Financial intermediation




Real estate and business activities




Health and social work




Other community and personal services








These sectors, in their entirety had credit outstanding of over €237 billion at the end of December 2009, a year in which our GDP reduced by 7% to €176 billion. The SME component of this, €32.2 billion was 13.5% of the overall total.

The level of credit they were responsible for increased by 121% in the previous five years. The deposits of these sectors maintained. €87.9 billion means that the overall ratio of deposits to loans was 2.7.

It is very hard to see much action in the construction sector given the collapse in demand or in the hotel and restaurant sector given the huge overcapacity as a consequence of tax breaks valued at €1 billion. Real estate is dormant and there will not be much international growth in agriculture.

Supply Perspective

The Financial Regulator has insisted that Tier 1 capital at AIB, which in common with its counterparts, is to be 8% means that additional capital of €7.4 billion is necessary by 31 December 2010. It is not yet clear where this is to come from.

AIB is the dominant force in the Irish deposit market laying claim to customer current and deposit accounts worth €52 billion of its total customer account base of €83.9 billion.

Bank of Ireland has a similar customer account total, €85 billion – but only €35 billion of this is derived in Ireland. The remainder is sourced in the UK and capital markets. Additional credit means additional capital.

AIB’s credit commitment to these sectors at 31 December 2009 and its NAMA relationship is as follows:



Change in borrowing

Dec 2005 – 09
AIB Resident Loans

€ Million


NAMA AIB Bound Loans

Dec 2009 €Million

Agriculture and Forestry





Mining and quarrying





Electricity, Gas and Water



Construction and Property



Wholesale and repair


Hotels and restaurants


Transport, storage and communications



Financial intermediation


Real estate and business activities


Health and social work


Other community and personal services






Bank of Ireland had an Irish loan book of €63,450 million, slightly less than that of AIB. The make-up of it was:


Residential mortgages



Property and Construction






Corporate and SME










Sunday, July 11, 2010

Credit availability crisis for Irish bank customers

Irish retail and business bank customers are continuing to experience a great deal of uncertainty in securing bank financing.  The latest monthly statistics published by the Central Bank illustrate the dependency of the banking system on funding from sources other than the deposits of Irish customers.

Retail clearing banks include AIB, Bank of Ireland, National Irish Bank, Ulster Bank and permanentTSB.  There are about 25 non-clearing banks

April 2010

Retail Clearing Banks €113,804 €197,611 €83,807
Non-Clearing Domestic Banks €50,335 €130,815 €80,480
  €164,139 €328,426 €164,287
Non--Clearing Foreign Banks €7,901 €18,097 €10,196
  €172,040 €346,523 €174,483


May 2010

Retail Clearing Banks €112,491 €196,674 €84,183
Non-Clearing Domestic Banks €50,764 €129,517 €78,753
  €163,255 €326,191 €162,936
Non-Clearing Foreign Banks €8,217 €18,749 €10,532
  €171,472 €344,940 €173,468


Total private sector credit amounts to just under €352 billion of which almost 93% is funded by the above sources.

The loans outstanding above include residential mortgage finance of just under €108 billion.  There is also an additional €37 billion in securitised mortgage finance bringing the total owing by the residential mortgage sector to €145 billion.  €57 billion was provided by the retail clearing banks and €51 billion by the non-clearing banks / building societies.

2010 World Heritage Site candidates to be decided in Brazil

The World Heritage Committee of the United Nations Educational, Scientific and Cultural Organisation (UNESCO) is to meet in Brasilia for its 34th from 25 July to 3 August and will decide on new candidates to be listed as world heritage sites.

There are two world heritage sites in Ireland. Newgrange, Knowth and Dowth archaeological sites on the River Boyne was listed in 1993 and the 7th century monastic complex at Skellig Michael 12 kilometres of the coast of Kerry was listed in 1996.  There is one site listed in Northern Ireland – Giants Causeway and Causeway coast.

Ireland has submitted 7 sites to this year’s convention. These include:

  • The glaciated karst landscape of The Burren
  • The historic City of Dublin based on the Georgian architecture developed from 1714 to 1830 that was developed speculatively by the owners of the great estates that resulted in the city becoming, after London, the second city of the British Empire.
    The Neolithic landscape and examples of human settlement of the Céide Fields and north Mayo boglands
  • Western Stone Forts in Clare, Galway and Kerry to illustrate a class of enclosed drystone circular monument used by maritime communities
  • The monastic city of Clonmacnoise which marks a significant stage in the development of early medieval Christianity
  • Early medieval monastic sites in Clonmacnoise, Durrow, Glendalough, Inis Cealtra (Clare), Kells and Monasterboice.
  • The royal sites at Cashel, Dún Ailinne, Hill of Uinseach, Rathcroghan and Tara

The convention governing world heritage was ratified in 1972. Ireland became one of the State Parties to it in 1991. Three of those State Parties – Marshall Islands, Kiribati and Tajikistan - have no properties inscribed on the World Heritage List to date.  Ireland is represented on UNESCO by Ambassador Paul Murray.

Thirty two new properties in total were submitted for inscription on the World Heritage List this year: 6 natural, 24 cultural and 2 mixed (i.e. both natural and cultural) properties, including four transnational nominations. In addition, 9 extensions to properties already listed have been proposed.

The Committee will also review the state of conservation of the 31 World Heritage properties inscribed on the List of World Heritage in Danger and may decide to add to that list new properties whose preservation requires special attention. The In Danger List features sites which are threatened by a variety of problems such as pollution, urban development, poorly managed mass tourism, wars, and natural disasters, which have a negative impact on the outstanding values for which the sites were inscribed on the World Heritage List.

To date the World Heritage List recognizes 890 properties of “outstanding universal value,” including 689 cultural, 176 natural and 25 mixed properties in 148 States Parties.

The Convention encourages international cooperation to safeguard the common heritage of humanity. With 187 State Parties it is one of the most widely ratified international legal instruments. When signing the Convention, States Parties commit to identifying sites for potential inscription and to preserving sites on the World Heritage List, as well as sites of national and regional importance, notably by providing an appropriate legal and regulatory framework.

The World Heritage Committee, responsible for the implementation of the 1972 Convention, comprises representatives of 21 countries, elected by the States Parties for up to six years. Each year, the Committee adds new sites to the List. The sites are proposed by the States Parties. Applications are then reviewed by two advisory bodies: cultural sites by the International Council on Monuments and Sites (ICOMOS), and natural sites by the International Union for Conservation of Nature (IUCN), which inform the Committee of their recommendations. The International Centre for the Study of the Preservation and Conservation of Cultural Heritage (ICCROM) provides expert advice on conservation and training in restoration techniques.

The World Heritage Committee also examines reports on the state of conservation of inscribed sites and asks States Parties to take appropriate conservation and preservation measures when necessary. The Committee supervises the disbursement of over $4 million annually from the World Heritage Fund aimed, among other purposes, at emergency action, training of experts and encouraging technical cooperation. UNESCO’s World Heritage Centre  is the Secretariat of the World Heritage Committee.

Monday, July 5, 2010

Exorbitant judicial salaries in Ireland

The publication of the Report on Senior Salaries for 2010 in the United Kingdom provides interesting evidence of how the Irish taxpayer is once again screwed.

The following is a comparison of judicial salaries in the Republic of Ireland, the United Kingdom as a whole and in Northern Ireland, where special allowance is made in the case of county court judges who carry out significantly different work than their counterparts elsewhere in Great Britain – presiding over non-jury trials under the ‘Diplock’ system for dealing with terrorist cases, even though the number of such trials is lower than in the past.  But the provisions which were due to expire in July 2009 are to continue until at least July 2011.


  Ireland United Kingdom Northern Ireland
Chief Justice / Lord Chief Justice €295,916 €290,212 €259,140
President of the Supreme Court   €250,297  
President of the High Court / Chancellor of the High Court €274,779 €250,297  
High Court Judge €243,080 €209,031 €209,031
President of the Circuit Court / Recorder (of Belfast) €249,418 €167,640 €167,640
Circuit Court Judge / County Court Judge €177,554 €155,238 €167,643
President of the District Court / Senior District Judge €183,894 €146,150  
District Court Justice €147,961 €124,534 €124,534


Ireland has 147 judges – 7 in the Supreme Court; 36 in The High Court; 37 in the Circuit Court and 63 in the District Court.  The United Kingdom has 2,151 judges.  That works out as one judge for every 28,550 citizens in the UK and one judge for every 30,000 citizens in the Republic of Ireland.  The Chief Justice of Ireland was paid €295,916 last year.  The Lord Chief Justice of the United Kingdom is paid €290,000 and his counterpart in Northern Ireland is paid €259,000 while the Chief Justice of the US Supreme Court is paid €173,000 - 60% less than his Irish counterpart.

Irish judges were not charged the pension levy applicable to all public servants in Ireland in 2009.  However, by October 2009 72 Irish judges made voluntary payments that amounted to €698,000 and standing order commitments amount to €45,200 per month in addition.  There is no specific ‘due date’ for these voluntary payments.

Members of the judiciary are unique insofar as they receive no incremental salary increases, nor performance related pay. 

The prevailing economic climate in the UK and Ireland has led to a healthy situation as far as the recruitment and retention of judges is concerned.

Research carried out in Britain suggests that salaries are not the most important factor in encouraging or discouraging applications.  The most unattractive feature of being a judge is the isolated nature of the role, loss of flexibility, the requirement for travel or relocation.

Judicial pensions are an attractive element in the total reward package of the judiciary and the terms of their pensions were enhanced following a High Court case in 1994.

Friday, July 2, 2010

Excesses of greedy Irish lawyers curbed

4 Courts and RowersThe gallop of a posse of greedy Irish barristers and solicitors has been halted by the Taxing Master, a court official who adjudicates on their costs.  He imposed an 82% reduction on fees of €2,143,546 arising in a personal injury case involving  meat factory worker who was injured by a falling carcass.

Should readers conclude that the leadership of the Department of Justice and Law Reform is as weak and as ineffectual in defending the public interest as that in the Department of Finance  over the past decade?

The Taxing Master described these charges as “revolting in the extreme”. They are a direct and unmitigated consequence of a profession shielded from the realities of a genuinely competitive marketplace, cosseted by self-regulation and indifferent to the interests of consumers and the public at large.

The Competition Authority reported on competition in the legal profession in 2006 and issued 29 recommendations, over half of which were directed at the Department of Justice and Law Reform and several of which relate to fees. This Report stressed the urgent need for radical reform, independent regulation a far higher standard of transparency with the public. The Department acted on only one of fifteen recommendations directed at it – relating to the use of the first official language.

Last year The World Bank reported that legal fees in Ireland were among the highest in the world as The Competition Authority’s recommendations. Is this to be the pivotal catalyst to spur an export-led economic recovery by multinational corporations in Ireland?

The Department of Justice and Law Reform is probably the largest purchaser of legal services in the State. It is high time that the recommendations of The Competition Authority no longer gathered dust and cobwebs and that our country had a legal profession that is grounded like its counterparts in other common law jurisdictions