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Bank Guarantee

Over €5 million spent on bank guarantee legal advice since 2011

Over €5 million has been spent with one legal firm alone since 2011 on advice related to the controversial bank guarantee scheme of 2008.

Updated 8.15pm

THE DEPARTMENT OF Finance has spent over €5 million on legal advice related to the bank guarantee scheme since 2011, according to recently-released figures.

In total some €5,080,053 has been paid to the legal firm Arthur Cox since 2011 for advice solely relating to the bank guarantee scheme which was officially ended in March this year.

The scheme has proved hugely controversial having effectively saddled the Irish taxpayer with over €64.1 billion of debt when the Fianna Fáil-led government took the unprecedented decision guarantee all assets and liabilities of Irish banks in September 2008.

Following a parliamentary question from Fianna Fáil’s Niall Collins, Finance Minister Michael Noonan has disclosed that in 2011 his department spent  €1,169,614 spent with Arthur Cox for legal advice with that figure more than doubling to €2,929,427 in 2012.

So far this year, the government has paid the firm €981,012 for advice relating to the bank guarantee scheme.

The advice comes in addition to that provided by the Office of the Attorney General and the Office of the Chief State Solicitor but Noonan said in his written answer: “However, it [the Department] also uses outside legal advisors in circumstances requiring legal services of a specific nature.”

Arthur Cox is Ireland’s largest finance practice and says on its website: “We are consistently at the forefront of many banking law developments including most recently the State Bank Guarantee.”

In addition to the legal fees paid to Arthur Cox, the Departmnet also spent over €960,000 with Matheson for “advice on transactions undertaken by the Minister in relation to Irish Life”.

Irish Life was recently sold to Canadian company Great-West Lifeco for €1.3 billion in February.

Thousands of euro was also paid out to barristers between 2011 and this year.

Barristers David Lennon and Garret Byrne earned €6,939 and €7,638 respectively in 2011 for a discovery report related to the Nyberg Commission inquiry into the collapse of the Irish banking system.

Senior counsel David Barniville and Niamh Hyland received €36,402 and €24,657 respectively for their advice related to the Credit Institutions Stabilisation Act.

This was the legislation which gave wide-ranging powers to the Minister for Finance in relation to the banks. Among other things it gave Brian Lenihan discretion to create the now defunct promissory note arrangement.

First published 2.40pm

Read: Cabinet papers from 2008 set to become available

Read: No full record of who visited Taoiseach’s department on bank guarantee night

Read: Did the Taoiseach talk to staff in his department about the bank guarantee?

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