Costs ruling means the innocent will underwrite the wrongdoers

IN explaining why he awarded costs of £6.7 million to the legal team that acted for Goodman International and Mr Larry Goodman in the beef tribunal, the Taxing Master, Mr James Flynn, compared the tribunal to the Nuremberg trials, pointing out that the two generated a comparable amount of paper.

The analogy helps to indicate the scale of the tribunal and the amount of legal work involved, but is other wise rather misleading. At Nuremberg, the guilty were punished. After the beef tribunal, it is the innocent - in this case the Irish public - that must suffer. Not alone does the Irish taxpayer have to pay about £68 million in penalties to the European Union for malpractice in the beef industry in 1990 and 1991, but the largest company in that industry does not even have to pay its costs in an inquiry made necessary largely by its own wrongdoings.

Two issues arise from the Taxing Master's ruling. One is whether it is right that Goodman International and Mr Larry Goodman should be entitled to have most of their costs paid by the public. The other is whether, even if the costs have to be paid by the taxpayer, they should amount to anything like £6.7 million, a sum described by Mr Flynn himself as "enormous".

The first issue was largely out of the Taxing Master's hands, since Mr Justice Hamilton had already decided to award costs to Mr Goodman and his companies. That decision, however proper it may be in strict legal terms, is open to question on the grounds of basic justice.

Some of the allegations against Mr Goodman and his companies, were found to be either baseless or unproven, and clearly both were entitled to the costs incurred in defending themselves against them. But on the questions that took up most of the tribunal's time, and therefore accounted for most of its cost, Goodman International was shown to have engaged in a whole series of frauds and malpractices.

In assessing costs for the Kerry Babies tribunal in 1985, Mr Justice Lynch wrote that "a factor which must be taken into account in deciding the question of costs is the extent to which the conduct of the parties contributed to the necessity or a public tribunal of inquiry". There is no doubt that Goodman International contributed enormously to the need for the beef tribunal.

It did so in the first place by systematically abusing public funds in three ways by large scale and organised tax evasion, by misappropriating beef that belonged to the European Union, and by what the tribunal report called a "substantial abuse" of the export credit insurance scheme. And it also did so by repeatedly and publicly denying allegations that it was engaged in these practices, issuing misleading statements.

IT is, however, unclear from the report of the tribunal whether Mr Justice Hamilton used this criterion in deciding to award their costs to Goodman International and Mr Goodman. On the one hand, he cited a passage in the" Tribunals of Inquiry Act which says that costs should be awarded "having regard to the findings of the tribunal". On the other, he specifically said the tribunal was not entitled to "have regard to any of its findings" when deciding whether to award, costs. The basis for the decision to award costs to Mr Goodman and his companies is not, therefore, clear from the report itself.

Given, however, that decision had already been made, the sheer scale of the costs awarded to the Goodman lawyers, advisers and witnesses on Tuesday is by any standards extraordinary.

To take the issue of lawyers fees first the least that might be expected is that some kind of standard fee should be paid, and that if Goodman International wanted to pay a premium for a more eminent barrister, that should be its own affair. In the case of Mr Dermot Gleeson SC, however, the Taxing Master found the public should pay for 56 days of appearances at the tribunal at the extremely high rate of £3,000 a day. Equally, Mr Gleeson received £52,000 for just two written submissions that he made at the end of the Goodman hearings, very much more than an author might expect to receive for a best selling book.

Secondly, much of the work for which the public is to bear the cost cannot be said to have helped the tribunal in its task of establishing the truth, and some of it merely served to increase the amount of time and money involved. For example, £118,157 is to be paid to Somers and Associates for analysing beef prices in the years 1986 to 1991. The purpose of this analysis was to show that the prices paid to Irish farmers in those years were increased by Goodman's exports of beef to Iraq.

This analysis was undoubtedly undertaken in good faith by the company involved. Far from helping to reveal the truth, however, it served merely to obscure it and to take up a good deal of time at the tribunal to no useful purpose. For it was based on an assumption that Goodman International knew to be wrong: that the beef for Iraq was bought from Irish farmers in the first place.

In fact, the beef was taken mostly from EU intervention storage and the supposed economic benefits to Irish farmers, were, in the words of the tribunal report, "illusory rather than real". Not alone did the public have to spend a huge amount of time and money to establish a truth that the company could have volunteered on the first day, but it must now also pay for the company's efforts to obscure that truth.

Similarly, the public is now to be asked to pay the Goodman public relations consultant, Mr Pat Heneghan, £100 an hour (later dropped to a mere £1,500 a week) for "patrolling the coverage" of the tribunal in the median. The Taxing Master considers it very reasonable" that the public should pay a total of £162,361 for a campaign aimed at ensuring that journalists and broadcasters would report activities including tax evasion, large scale theft and the systematic abuse of state aids to industry in the best possible light. How does this serve the public interest?

IT also seems extraordinary that Mr Brian Britton, the former deputy chief executive of Goodman International, is to be paid £150 an hour, amounting to a staggering £35,000, merely for preparing his evidence and attending the tribunal, even though he was one of the people at the top of a group of companies which were found to have engaged in large scale malpractice.

Other costs are less significant in financial terms, but are bound to add to public cynicism. The Goodman legal team is allowed £34,000 for private catering services on the basis that this avoided the need to shave personnel "leaving base and finding alternative eating facilities". Yet, there was no need either to leave Dublin Castle or to explore the wilds of Dame Street to find food. There is a good, cheap public restaurant in the Castle itself, and it was good enough for Mr Justice Hamilton, the other legal teams, the journalists, and the witnesses.

Likewise, Mr Larry Goodman is to be paid £3,536 to cover his hotel bills. He gave evidence to the tribunal over four days. Even assuming that he stayed in a Dublin hotel for five nights in order to do so - a long time for a witness who lives in Co Louth - that works out at over £700 a night. The Taxing Master does not explain the size of this bill or his reasons for thinking it reasonable that it should be paid by the public. In that, at least, the beef saga is ending as it began, with the public interest nowhere in sight.