Dominic Hannigan (Meath East, Labour)
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Question 642: To ask the Minister for Justice and Equality the amount of money that is currently invested by the courts on behalf of wards of State and minors; the amount of money in the overall investment fund in the years 2006, 2007, 2008, 2009, 2010 and 2011; the projected return on investment in each of these years; the way persons who have been appointed wards or minors committees access the details of the investment being made on behalf of those they represent; if they are able to meet and discuss the options with the fund managers; if there is a contingency plan if the overall investment fund is no longer able to sustain those who depend on it at a reasonable level; and if he will make a statement on the matter. [1130/12]

Alan Shatter (Dublin South, Fine Gael)
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Jurisdiction in Wards of Court matters is vested in the High Court. The Courts are, subject only to the Constitution and the law, independent in the exercise of their judicial functions and, therefore, it is not open to me as Minister to comment in any way. Section 4(3) of the Courts Service Act 1998 Act provides that the Courts Service is independent in the performance of its functions, which are specified in section 5 and includes the management of the Courts. Court funds which are held for the benefit of Wards of Court are private funds under the control of the Courts Service which, through its offices in the High, Circuit and District Courts, has responsibility for the management and investment of funds in court.

However, in order to be of assistance to the Deputy, I have had enquiries made and the Courts Service has informed me that these funds, which amount to approximately €1.178 billion at 30th September 2011 per the latest audited financial statements, are managed in a fiduciary capacity by the Courts Service on behalf of more than 18,000 beneficiaries. Approximately 2,650 of these are wards of court. Also included are Minors and various categories of litigant. Table 1 sets out the value of funds under management for each of the financial years 2006 to 2011 inclusive.

Table 1: Value of Court Funds (2006 – 2011)

Table 1: Value of Court Funds (2006 – 2011)

Funds under the control of the Courts are required by law to be invested in accordance with the Trustee (Authorised Investments) Act 1958 and the orders made thereunder. A major modernisation programme for the governance and management and investment of court funds commenced in 2003 and has resulted in: improved governance through the establishment of an Investment Committee, chaired by the President of the High Court. Its membership includes external independent experts. Annual financial statements are audited by independent external auditors and published on the Courts Service website at www.courts.ie; access to independent investment and risk management advice through the engagement of independent investment advisors to ensure investment policies are in compliance with the relevant legislation and best practice; investment strategies have been implemented to ensure a consistent approach to the investment of all court funds. The unitised funds used have been approved by the Financial Services Regulatory Authority; following a competitive EU procurement independent external fund managers were appointed in 2003 to manage these funds. The performance of the fund managers is monitored by both the investment advisors and the Investment Committee on a regular basis.

I am informed that the Courts Service operates a very conservative and prudent investment policy and seeks to invest all funds in the best interests of each beneficiary. A strong investment performance has been exhibited by court funds since the current investment strategies were established. Table 2 shows the investment performance, net of fees, for the last seven financial years to 30th September 2011 and the cumulative investment performance to date.

Table 2: Investment Performance of Court Funds (net of fees), since inception of the Unitised Fund Structure, and for the years 2005 - 2011.

· Note: Cash Fund commenced 21st June 2006

· Note: Following a review of the composition asset mix of all strategies, the

Growth Fund was allocated the identical asset mix as the Balanced Fund.

It was therefore deemed appropriate to move all the beneficiaries in the

Growth Fund to the Balanced Fund in order to ascertain a lower

management fee scale structure. On the 7th September 2011 the transition

was completed.

The investment of funds in an income growth strategy is communicated to the beneficiaries' representatives before the investment is made. Beneficiaries' representatives do not have direct access to fund managers as the fund managers' relationship is with the Courts Service. However, the Courts Service has informed me that it is exploring the possibility of giving access to specialist investment advice to beneficiary representatives in limited types of cases. All cases are reviewed periodically by the Wards of Court Office, and if the beneficiary's circumstances change, the strategy may be varied accordingly. Individual statements are issued to all beneficiary representatives on request.

While there will always be fluctuations in the value of investments from time to time, over the eight year period of the new investment strategies being in operation, there has been good investment performance. I am informed that the court managed funds have performed well particularly in light of the volatility of the markets in recent years. In the financial year, ended 30th September 2011, most court funds experienced positive investment performance.

Finally, the Deputy will appreciate that the amount of damages awarded or approved is a matter for the court and cannot be guaranteed to meet the ward's needs for their lifetime. The Courts Service responsibility is not to ensure that the amount awarded is sufficient to maintain an individual for their lifetime but rather to manage the award prudently to the ward's benefit.