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
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
The fees agreed with the administrators were on
the basis of €475 an hour, which following the economic collapse look very
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.
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