Loss of money belonging to wards of court needs review - committee

An independent review is required to examine the management of funds belonging to wards of court that lost significant amounts of money during the financial crisis, the Oireachtas Justice Committee has said.

A ward of court is someone who, due to a variety of primarily medical reasons, is unable to manage his or her own affairs, and decisions are taken on their behalf by the Courts Service.

In recent years there has been growing concern about the fitness for purpose of the system, which is due to be replaced.

Campaigners have demanded clarity on the management of some funds, about 63 of which are said to have been badly affected by poor investment decisions – some entirely wiped out. The Courts Service has said there is “no substance” to such claims.

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Launching a report on its hearings into the matter on Thursday, Justice Committee chairman Caoimhghín Ó Caoláin said the issue had affected many of the “voiceless” people dependent on the system.

In 2015 there were about 2,700 wards of court, with funds valued at over €1 billion. Cases include people with severe brain injuries, dementia and other conditions that prevent them looking after their own affairs.

“Wards and their families rely heavily on the wards of court system and the expertise within the Courts Service to invest these funds wisely,” Mr Ó Caoláin said.

‘Significant depletion’

“During the financial crisis and particularly over the period 2007 to 2009, decisions taken by Courts Service managers led to a significant depletion of funds of a number [of wards].”

While this may be a relatively small amount, Mr Ó Caoláin said, “we were told that some lost their entire funds and indeed were left dependent on social welfare payments”.

The committee said a number of cases highlighted by the Justice for Wards campaign group, in which funds were said to be “significantly depleted”, should be subject to independent audit.

It has also called for a review of the Courts Service’s general engagement with parents and guardians of wards.

However, the Courts Service said claims of “significant losses” in accounts have already been disproved by an independent and external audit, the findings of which it will publish next week.

In a statement, responding to the report launch, it said court-managed funds made returns of almost 90 per cent over the last 14 years, despite the recession.

Of the 63 cases in which particular concern has been identified, it said, an independent examination found that just four had made a loss. It said there was a total of €12.3 million in net gains made on those accounts.

“The investment policy adopted has helped accounts last much longer than they would have otherwise,” it said.

‘Outside expertise’

“But no investment policy can ensure money for the lifetime of every ward, where their means are limited to start with.” It added that “outside expertise” is used to guide investments.

Committee members said the key issue now is the implementation of its recommendations, a copy of which will be given to Minister for Justice Charlie Flanagan.

A new “assisted decision making” service for future investment is provided for in the Assisted Decision Making (Capacity) Act 2015, designed to wind down and modernise current ward structures.

However, Mr Ó Caoláin said the prospect of the introduction of this service by the end of the year was “remote”.

The committee has recommended that auditing of invested funds should fall under the remit of the Comptroller and Auditor General (CA&G). The Courts Service said it had been open to this approach since 2001.

Mary Farrell of the Justice for Wards group said an independent review of how funds have been managed is a "matter of extreme urgency".