The judge who investigated the Siteserv affair has imposed a cap on legal fees that the State will pay for witnesses at the seven-year inquiry, setting barrister daily rates at levels far below fees for big commercial cases in the courts.
The move by Mr Justice Brian Cregan has prompted some witnesses to say privately they now face legal costs considerably greater than the State will pay, even though the judge did not criticise them personally in his report on the sale of building services company Sitserv to businessman Denis O’Brien.
One figure said the commission of investigation was paying only for costs linked to attendance at oral hearings behind closed doors, saying there was no reimbursement for potentially millions of euro in fees and costs that were run up for making responses to the judge’s two draft reports on the 2012 deal.
A Commission of Inquiry was established to investigate the 2012 sale of Siteserv to a company controlled by businessman Denis O’Brien. The €45 million sale came as the State-owned Irish Bank Resolution Corporation — the former Anglo Irish Bank — wrote off €119 million of the €150 million that Siteserv owed.
The State’s prospective bill for the fees Mr Justice Cregan will allow is not known. Despite the cap on fees, the overall bill is still considered likely to run to many millions of euro, given the large number of witnesses and the duration of the inquiry.
The commission had no comment on likely legal costs or on any other aspect of the draft legal cost directions that it recently circulated to certain witnesses. Such directions set out fees witnesses can claim for their part in the inquiry.
[ Tribunals and commissions of investigation have cost taxpayers over €500m ]
The commission told the Government last autumn that a final report dealing with costs matters would be issued by the end of March.
In addition to extensive legal representation behind the scenes for years, some of the best-known figures in the Law Library appeared for key witnesses in private oral hearings before the judge. Some barristers who appeared before the inquiry have since become judges.
The legal representatives included: Michael Cush SC, who acted for Mr O’Brien; the Irish Bank Resolution Corporation directors were represented by Gerard Durkan SC and Siobhán Phelan, before she became a High Court judge; John Rogers SC acted for three former IBRC executives; and Brian O’Moore represented Siteserv co-founder Niall McFadden before being appointed a High Court judge.
Maurice Collins, now a Supreme Court judge, represented accountants KPMG before his 2019 appointment as a judge in the Court of Appeal.
Mr Justice Cregan’s 1,542-page September report on Siteserv said the sale was based on “misleading and incomplete information” that the company provided to the nationalised IBRC, which wrote off €118 million of the €150 million that the company owed in the deal. The transaction was so tainted by impropriety and wrongdoing that it was not commercially sound, the report found.
Three inquiry participants said the judge’s cost directions set the daily rate for senior counsel appearing before the inquiry at €788.27 excluding VAT, and the daily rate for junior counsel at €394.14.
Such fees are well below appearance fees in complex commercial litigation before the courts. Senior counsel in such cases can command fees €3,500-€5,000 per day, and junior counsel can receive daily fees of €1,500-€2,500, according to a legal source.
[ Siteserv report stands as an unflinching indictment of highly questionable conduct in dark days of last financial crisis ]
The draft costs directions set by Mr Justice Cregan are in line with general guidelines he agreed with the Government and circulated previously to witnesses.
They put the daily rate for solicitors appearing before the inquiry at €624 and set a maximum fee of €780 for providing an affidavit of documents, subject to certain exemptions.
The legal source said the daily appearance fees set for barristers would be seen as low in normal circumstances but not necessarily so in the context of ongoing litigation running for years in which counsel might intermittently be involved in hearings and consultations.
But certain witnesses, speaking only on condition of anonymity, said the judge’s cap on fees still left them personally exposed for most fees incurred.
Mr O’Brien legal representatives also include Brian Harmon BL and Joanelle O’Cleirigh of Arthur Cox solicitors. The representatives of the IBRC directors also included Jack Tchrakian and Jamie McGarry of Eames solicitors.
In addition to Mr Rogers, former IBRC executives Richard Woodhouse, Tom Hunerson and Peter Rossiter were represented by Keith Farry and Gráinne Hynes of Eames.
The legal team for the commission of investigation included John Hennessy, Anthony Aston, Mairead Coghlan, Barry Lennon, Kate McCormack and Sarah-Jane Hillery.