THE MAHON tribunal into planning corruption could ultimately cost nearly €250 million, according to new estimates drawn up by its chairman, Judge Alan Mahon.
The new forecast, which is set out in a document drawn up by the Department of the Environment last month, is over €50 million higher than estimates for the final cost of the tribunal put forward by the State’s financial watchdog, the Comptroller and Auditor General in December 2008.
In a letter to the Dáil Public Accounts Committee, the secretary general of the Department of the Environment Geraldine Tallon said that the current estimate of the tribunal chairman was that the total cost could be in the region of €247 million.
She said this forecast had taken account of a Supreme Court ruling last year which reversed a High Court decision that the construction company JMSE was not entitled to costs on the basis of the tribunal’s finding that it had obstructed its work.
Ms Tallon said the comptroller had estimated in a report in December 2008 that the total cost of the Mahon tribunal would be between €171 million and €194 million, including third-party costs of between €84 million and €104 million.
She said that the comptroller had warned that third-party costs could be much higher “if a final pattern resembling previous tribunals were to emerge”.
In her letter, which was published last week on the website of the Public Accounts Committee, Ms Tallon stated: “In April 2010, the Supreme Court ruling in the JMSE judicial review litigation reversed the decision of the High Court that JMSE were not entitled to their costs on the basis of the tribunal’s finding that they had obstructed the work of the tribunal.”
“This judgment may have implications for other claims for third-party costs,” the letter added.
Ms Tallon said the current estimate of the tribunal chairman, taking account of the Supreme Court ruling, was that the total costs may be in the region of €247 million.
“This would be based on an estimate of total third-party costs of something in the region of €147 million.
“However, there is no way of knowing the amount that will be claimed and agreed in respect of third-party costs over the period 2003 -2008, until such time as the specific claims are submitted, assessed and resolved.
“The first claims and payments for third-party costs arising from this period are likely to be made in the third quarter of this year,” she added.
Ms Tallon said that so far the chairman of the Mahon tribunal had only ruled in relation to third-party cost applications relating to the period 1997-2002.
She said that Judge Mahon proposed to rule on cost applications for the period 2003–2008 once the tribunal’s final report was written.
“There is a significant difficulty in assessing the scale and timing of potential costs arising from the award of third-party costs, based on the experiences in resolving third-party costs for the earlier period to 2002.
“More than 400 witnesses have appeared before the tribunal since 2002 [compared to 75 third-party bills received for the period to end 2002], and it is reasonable to assume that it will take some years to receive, process and settle all third-party bills of costs, based on previous experiences.”
Ms Tallon said that it was also open to the tribunal to allow the cost of compliance with discovery orders it had made to parties either as standalone costs or as part of an overall third-party bill of costs.
Ms Tallon said that up to 2004 the tribunal had made over 9,000 discovery orders, but that the chairman had declined to update this figure “on the basis that it is not useful in estimating discovery costs due to the disparities in the amounts involved”.
Ms Tallon added that the Mahon tribunal had indicated to the department that it was likely to complete its final report “within the coming summer period, with a view to publishing the report as soon thereafter as practicable”.
