Ennis legal costs “significant cause for concern”

LEGAL costs which could be more than €500,000 for Ennis Town Council’s defence of two High Court challenges to national legislation are “significant cause for concern” for the local authority.

In 2013 Ennis Town Council were involved in two separate cases as a defendant. One case related to the Ennis Casual Trading Bylaws 2011, representing a challenge to the Casual Trading Act 1995 and in particular the status of casual trading on market rights. The council incurred legal costs of €147,000 in relation to this matter.

Currently, the council is involved in a separate High Court case regarding the deregulation of the taxi regime. A number of sample cases are being heard in relation to this, including one involving Ennis. The legal costs relating to this are estimated to be in the region of between €300,000 and €450,000.

Concern about the cost of the legal battles in defending national legislation to the local authority was outlined at this week’s meeting of Ennis Town Council where the Local Government Auditors Report for 2012 was outlined.
Town manager Ger Dollard in his report stated, “This is a significant cause for concern to the council. The cases referred to relate to challenges to national legislation and are cases that have been taken against the council. The council has no choice but to defend cases taken against it. Both cases have involved extensive High Court hearings.

“The council has had detailed discussions with the relevant Government Departments and also made every effort to operate the cases on the most cost effective basis possible. It remains the council’s view that costs relating to cases such as this should not be funded solely by the council.”

Speaking at the meeting, he added that an allocation of €250,000 has been made available towards the costs of the taxi case.

Councillor Mary Coote Ryan commented that for a council to incur costs in defending a national decision is “unfair”. While Councillor Peter Considine stated, “It’s so unfair of the citizens of any town to be landed with such a bill.” Councillor Michael Guilfoyle acknowledged the work that has been done by officials within Ennis Town Council saying they have done “everything possible to keep services going.”

Councillor Tommy Brennan asked if the councillors could direct the local authority not to pay the costs. “It’s a disgrace we were brought into these cases that we hadn’t hand, act or part in,” he said.

However, Mr Dollard stated that the authority could not be directed to act illegally. Councillor Brennan stated that the government should pay the council’s costs fully, with Councillor Johnny Flynn voicing support.

Councillor Brennan added, “There is a lot of work that could be carried out in Ennis if we had that money.”
Mr Dollard described the report as “very positive overall”, however he acknowledged a disimprovement in the council’s revenue account. This he said was “largely attributed to the costs of legal cases and inadequate rate collection.”

The rate collection rate decreased by 4% to 54% from 2011 to 2012 resulting in the year end debtors increasing to €3.38 million at December 31, 2012. During the audit a sample of the top 15 arrears accounts, representing 28% or €957,000 of the arrears were selected for examination.

This showed that 64.14% were in receivership / liquidation; 5.39% were making payments on an instalment basis; 24.16% have either paid in full or are on an instalment basis and 6.31% are subject to legal formalities.

According to Mr Dollard, “The audit sample reflects the difficulties being experienced by the council and the efforts being made to secure collection of revenue. The audit sample does not reflect the significant level of vacancy evident in the town area which also impacts on collection levels.”

A collection performance of 91%, a reduction of 1% on the 2011 total was recorded by the council on rents and annuities for 2012. The closing arrears increased slightly to €132,000 at the year end. The town council has 698 active rental accounts. The 15 highest accounts in arrears are recorded at €45,000 and account for 35% of the total arrears. It was noted in the auditor’s report that arrears on these accounts reduced to €28,000 as at January 2014.