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On Thursday the president of the High Court cut a fee claim of €2.75m from the joint administrators of Quinn Insurance by 20%. Once again, Irish public sector institutions have shown themselves to be a 'soft touch' in respect of getting value for money for the taxpayer. The annual public procurement bill is about €15bn and in contrast with well-run countries such as Norway and Sweden, the system is still saddled with Victorian rules of 'commercial confidentiality.' Simply, there is lack of transparency in a system that gives a big advantage to insiders. The administrators, Michael McAteer and Paul McCann of accountancy firm Grant Thornton, were appointed joint administrators by the Financial Regulator in April 2010. It was up to the Central Bank to agree a competitive fee following the initial appointment, which had to be done at maximum speed. Nobody on the public side was responsible for control of the cost. The fees agreed with the administrators were on the basis of €475 an hour, which following the economic collapse look very generous. It was a contract with no risk for Grant Thornton at a time when many firms were scratching around for work. There were many others who could have done the job. The administrators sought court approval for payment of about €2.75m, plus expenses, for costs incurred in the administration of the company between August 1st and November 30th last. Mr Justice Nicholas Kearns said on Thursday that he would approve the fees sought, less a 20% reduction. The judge also approved an additional application by the administrators for what were previously termed as “substantial” fees for costs related to the sale of Quinn Life Insurance (QIL), including fees charged by Macquarie Capital Europe. These fees were not disclosed on the grounds they were 'commercially sensitive.' Mr Justice Kearns said he was imposing the 20% reduction for reasons including the fact the “difficult and completely unprecedented” situation that existed at QIL when the joint administrators were appointed no longer prevailed. The fees charged by the administrators for the August to November 2011 period were based on rates previously approved by the High Court, he noted. The judge said a lot of the work of the administrators had now become routine and the sale of the company to the joint venture had significantly reduced the burden on the administrators. He also found there was repetition in relation to some of the work carried out by the administrators and Macquarie. Mr Justice Kearns also said he was taking into account other factors, including the sharp downturn in Ireland’s economic situation since the joint administrator’s appointment and the fact that, in cases before the Commercial Court, other judges had cut administrative fees sought by professionals. The public purse is effectively empty but it's as if the 'good old day' were still in swing. Check out our new subscription service, Finfacts Premium , at a low annual charge of €25 - - if you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to support the service. It's a simple fact that in the prevailing economic climate, the provision of high quality content cannot be sustained through advertising alone. Business executives who put a premium on time and value high quality information, should use our service. © Copyright 2011 by Finfacts.com
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