Committee calls for radical overhaul of Courts Funds Service

The Public Accounts Committee has called for the urgent overhaul of the Courts Fund Office (CFO). In its report on Managing and Protecting Funds Held in Court the Committee has criticised the CFO for operating what it terms 'an archaic service'.

The CFO provides a banking and investment service for the civil courts in Northern Ireland. As of June 2014, it managed around £290 million on behalf of approximately 14,000 clients, such as children (minors) awarded damages as a result of civil legal action, or the financial affairs of people who have become mentally incapacitated.

The Chairperson of the Public Accounts Committee, Michaela Boyle MLA said: "The CFO is charged by the courts to manage the money of some of the most vulnerable people in our society and as such should aspire to the highest standards of performance and customer care.

"Instead it would appear to us that the CFO is operating a 'Cinderella service', stuck in the past. A radical overhaul is urgently needed to ensure a more modern, open and transparent approach to delivering returns and managing investment risk for clients."

A modernisation programme commenced in 2004 but was closed in 2010, with limited progress. Legislative change has also been delayed. The CFO also appears reluctant to acknowledge that it does not have the skill base necessary to scrutinise the professional advice of the stockbroker it relies on for investment advice.

Ms Boyle concluded: "The Northern Ireland Courts and Tribunals Service needs to extend independent financial expertise within its governance structures, to ensure that any and all investment decisions taken on behalf of clients are appropriately analysed and robustly challenged if and when necessary".

ENDS

Notes to Editors:

1. The Courts Funds Office (CFO) is an office of the court and is administered as a business unit within the Northern Ireland Courts and Tribunals Service (NICTS) which is an agency of the Department of Justice (the Department).

2. Funds may be invested in a variety of ways under judicial direction. These include being placed in deposit accounts, short-term and long-term investment accounts, and being invested in certain designated securities.

3. Investment decisions taken on behalf of clients are made by a member of the judiciary. Under current arrangements the CFO relies on the professional advice of a stockbroker to make recommendations to a judge of the relevant court regarding the investment of client funds. CFO employed the same stock broker for over 70 years, from the 1930s until 2008,. The Committee found it astonishing that it took so long to form any type of competition and says it is damming of CFO's management.

4. The Committee finds it unacceptable that little progress has been made in putting in place the legislative changes required to support modernisation.

5. The report finds that CFO appears content to rely on long established methods of investment for clients' funds. While investments should take account of liquidity needs, the Committee contends that this should not be at the expense of investment returns.

6. The Committee would like NICTS to introduce a new model of investment, utilising pooled investment funds, to maintain returns while managing investment risk effectively and reducing the administrative burden.

7. You can view the report here.

The current membership of the Public Accounts Committee is:

Ms Michaela Boyle (Chairperson)
Mr John Dallat (Deputy Chairperson)

Mr Roy Beggs
Mr Trevor Clarke
Mr Alex Easton
Mr Phil Flanagan
Mr Paul Girvan
Mr Ross Hussey
Mr Daithí McKay
Mr Adrian McQuillan
Mr Seán Rogers