No government department ever did a detailed analysis of the potentialexposure of the State, writes Liam Reid
On June 5th, 2002, when Dr Michael Woods announced he had signed the indemnity deal with the religious orders, following a Cabinet meeting, it produced barely any immediate public reaction because of the day that was in it.
That day the eyes of most Irish people were on Robbie Keane's last-minute goal against Germany in the World Cup, and who would make it into Mr Ahern's new Government the following day.
Since then, however, that deal has become arguably the most controversial decision made by the last government, and yesterday's report by the Comptroller & Auditor General will do nothing to change that.
Indeed, while the report has provided detailed information, much already in the public domain through the freedom-of-information process, fundamental questions remain about how and why the deal was negotiated and agreed to.
The fundamental question remains: why did the government agree to a deal which gave rise to unlimited liability for the State, yet scrapped the liability of the religious orders in return for €40 million in cash and 80 million in property. Government politicians have defended the deal stoutly, saying the cost was not going to exceed 500 million. They also argued that it was effectively the only option. The Government was committed to a redress scheme, with or without the orders, so any contribution was better than none.
The argument on cost is truly and utterly holed by the CAG report. While much focus has been on the fact that the CAG has put the potential bill at 1 billion, the report also highlights the fact that during the negotiations no government department ever did a detailed analysis of the potential exposure of the State.
Indeed the report highlights the fact that, as the negotiations with religious orders were ongoing, the potential number of claimants and cost of the scheme kept being revised upwards.
"The earliest estimates had put the potential claimants at 2,000," according to the CAG report. "By November 2001 the Department of Education and Science was estimating that the potential number of claimants was likely to exceed 3,000 and might rise to 4,000. By June 2002 it was being estimated that the number of claimants could be 5,200 or more."
The figures were drawn from disparate sources, from High Court cases to the numbers making allegations before the Laffoy commission. At no stage, it appears, was an attempt made to collate all of the potential claimants from various lists and cross-reference them to obtain a definitive list.
The estimates never included figures on freedom-of-information requests for personal information from former residents, which is a definite indicator of whether a person may be considering litigation.
The report also shows that an initial hard line on a minimum cash contribution of 127 million was never followed through.
When negotiations began in February 2001, the base line of the State was that it was willing to walk away from a deal unless this could be agreed. This never happened.
The orders took a hard line themselves, claiming their likely exposure was €54 million. While a May 2002 memo for Dr Woods said that that estimate might be correct, juries and courts might also be sympathetic to the plaintiffs in the current environment.
The Department of Education never made a detailed assessment of the figures provided by the orders, according to the CAG report. However the Government "noted that its approval [of the indemnity agreement] reflected the understanding of evidence which could be approved in any court proceedings as to the liability by the State", according to the CAG report.
The report also noted that concerns were expressed by the attorney general, Mr Michael McDowell, on not being kept abreast of developments, and about the possible underestimation of the exposure of the State.
Since then, as Minister for Justice, Mr McDowell has defended the deal, saying it was a political decision and he was properly consulted on the legal issues arising from the deal while attorney general.
He has acknowledged, however, that the merits of the agreement are "arguable".
An alternative to the deal had been mooted: the State "going it alone" on compensation and then seeking to recoup a share from the religious orders, as occurred in Canada. However, it led to the liquidation of the Christian Brothers in that country. Whether such a fear about bankrupting Irish orders, who still own a huge proportion of the education and healthcare infrastructure in Ireland, led to the Government's indemnity deal, is an issue which has yet to be teased out.