Thursday 18 December 2014

Rehab loses High Court challenge on lottery cap refund

Tim Healy

Published 06/06/2014 | 02:30

Alan Shatter
Alan Shatter

THE Rehab Group has lost its High Court challenge to the Justice Minister's decision to abolish a scheme set up to compensate charitable lotteries whose scratchcard prize funds were capped. The cap was brought in to protect sales of the National Lottery.

The Charitable Lotteries Scheme (CLS) was initially funded from the National Lottery surplus, but from 2005 it was 35pc funded by the Exchequer.

Of 19 charities who benefited, Rehab was "by far the largest", Ms Justice Iseult O'Malley said in dismissing Rehab's case.

Rehab received €3.9m out of €6m paid out in 2012 when the decision to phase it out over three years was announced, the court heard.

The then Justice Minister Alan Shatter, at a meeting in November 2011 attended by Angela Kerins and Frank Flannery of Rehab, raised issues including that a profit of only €9,452 was made on €4m sales of Rehab Lottery scratchcards. Mr Flannery told the minister it would be "morally wrong" to end the CLS.

In October 2012, the minister, in a letter noting that Rehab had received €80m under the CLS, said he had concluded that the CLS could not be justified in current economic circumstances and must be phased out by 2015. His decision was approved by the Taoiseach.

In judicial review proceedings challenging that decision, the Rehab Group and Rehab Lotteries argued that they had been denied fair procedures, had not been consulted about the intention to wind down the scheme prior to the formal decision and should have been given an opportunity to make representations.

Mr Shatter denied those claims. He believed that the existing criteria for the CLS were "unacceptable" in that they incentivised running charitable lotteries at extremely low profit margins or at a loss.

He was also concerned that a low proportion of already low profit margins would reach those whom the lotteries were intended to assist.

Ms Justice O'Malley yesterday said the CLS, as Rehab conceded, was not intended to provide compensation arising from the setting up of the National Lottery but was an effort to ameliorate the difficulties faced by some charities.

It was accepted that the beneficiaries had no legal right to its continuance. Unfortunately, the coming of harsher economic times seems to have produced a "harsher policy analysis" and it was not for the court to decide if that was correct.

The minister and advisers had simply concluded that the scheme was not a justifiable expenditure of public money. In this case, she could not rule that the traditional exemption of policy decisions from the application of the rules of natural justice had been abrogated.

In a statement yesterday, the Rehab Group noted the ruling and said it would seek to engage in "constructive consultation" with the Department of Justice concerning how charitable organisations could successfully operate lotteries in the future.

Rehab added that it had used funds from the CLS for projects to support the disabled and marginalised.

Irish Independent

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