The Department of Finance has launched a review of legal costs across Government departments and State agencies amid concerns over whether there are proper controls to ensure the State is not paying excessive legal fees.
It comes as new figures for Army deafness claims reveal 40 per cent - or €135 million of the final €321 million bill - has gone on legal fees.
The review follows concerns the Government is unable to quantify the exact amount the State is spending on legal fees in relation to non-compensation cases.
There is also no centralised control of legal cases and their costs, as each Government department is responsible for its own legal cases, although the Chief State Solicitor's Office does have an involvement in most cases.
Officials in the Department of Finance are also concerned that some State authorities have not been challenging the levels of costs being awarded against the State in some "repeat" cases, where they receive the same costs for each case even though there is much less legal work on later cases.
The review is not expected to focus on compensation cases, which have already been the subject of major reform with the establishment of the State Claims Agency to handle these cases.
Officials from the Department of Finance have been in contact mainly with the Chief State Solicitor's Office and the Attorney General's Office to gather information in a bid to identify the main costs and types of cases being taken against the State.
Meanwhile, the Comptroller and Auditor General is now expected to carry out a major investigation into legal fees across Government departments following the latest Army deafness cost revelations.
Of the €321 million paid to date, €95 million was in legal costs to plaintiffs' solicitors, while a further €40 million was paid out by the Chief State Solicitor's Office in legal fees defending the cases.
Yesterday Public Accounts Committee chairman Michael Noonan described the situation as "outrageous" while Sean Fleming of Fianna Fáil said it was "a disgrace".
The committee is planning to meet in private session next week during which its members are expected to ask the Comptroller and Auditor General to carry out a special inquiry into the level of legal fees paid in cases being taken against the State, including those relating to Army deafness, redress and other claims.