State liability from personal injury and negligence cases put at €3.6bn

Comptroller says €2m paid on bonuses to staff at NTMA, €479,000 to staff at Nama

Comptroller’s report notes performance-related payments of €479,000 were awarded to 56 staff at Nama in 2019. Photograph: Cyril Byrne

Comptroller’s report notes performance-related payments of €479,000 were awarded to 56 staff at Nama in 2019. Photograph: Cyril Byrne

 

The State is facing an outstanding liability of more than €3.6 billion arising from personal injury and negligence cases, the report of the Comptroller and Auditor General has found.

The report, published on Thursday, says that the estimated cost of settling outstanding claims has been steadily increasing over recent years.

The National Treasury Management Agency (NTMA) manages personal injury, property damage and clinical negligence compensation claims on behalf of the State and certain State authorities. In performing these functions it is known as the State Claims Agency (SCA).

“The number of claims under management has increased significantly since 2012. At the end of 2019, there were 11,580 claims under management including 2,472 claims in mass actions (general and clinical). In 2019, 2,704 claims were resolved, an increase of 6 per cent over the previous year.”

“The estimated outstanding liability at the end of 2019 has been estimated by the SCA at €3.63 billion – over three times the estimated outstanding liability at the end of 2012. A key factor in the increase in the estimated outstanding liability is the impact of a reduction in the real rate of return used, from three per cent to one per cent or 1.5 per cent on foot of a determination by the Court of Appeal in 2015.”

The comptroller’s report says that awards and associated claim costs of the SCA in 2019 amounted to €431.4 million – up 21.7 per cent year-on-year from 2018.

Payments

Provision for a discretionary performance-related payment is included in the contracts of the the majority of NTMA employees and the report notes that “performance-related payments of €2.05 million were made to 200 employees for 2019, of which €200,000 was paid to seven members of the executive management team”.

“For 2018, performance-related payments of €1.78 million were paid to 184 employees, of which €145,000 was paid to four members of the executive management team. The chief executive of the NTMA did not receive a performance-related payment in respect of 2018 or 2019.”

The report notes that in 2019, payments were made to 33 NTMA employees who participated in a voluntary redundancy scheme; the payments totalled €2.5 million with “garden leave” costing €100,000. Following the departure of the employees, 10 of their positions were not subsequently filled, 12 were filled at a lower annual cost and 11 were filled at the same or an increased cost. While redundancy was not introduced as a cost-saving measure, the report noted “the projected annual cost savings on staff salaries was expected to be €1 million”.

“The cost of the scheme should be recouped in 2½ years following its implementation. However, the examination team has not seen any evidence of a report to the NTMA board documenting the actual savings resulting from the redundancy scheme.”

The report also says that performance-related payments of € 479,000 were awarded to 56 staff at the National Asset Management Agency (Nama) in respect of 2019. And while the chief executive was entitled to be considered, he “waived his entitlement”, the report said.

Performance-related payments of €103,000 were awarded to seven Strategic Banking Corporation of Ireland (SBCI) staff in respect of 2019, with the chief executive receiving performance-related pay of €25,000.