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Dearbhail McDonald: Judges caught up in eye of financial storm

WHEN she remarked that Ireland's judges were not immune from the effects of the economic crisis, Ireland's new Chief Justice was speaking the truth.

Mrs Justice Susan Denham, Ireland's first female Chief Justice, used the occasion of her historic appointment last Monday to remind the public -- and the politicians with whom they have been in deep conflict -- that judges were acutely aware of the financial crisis.

There is not one courtroom in the country that has not played host to what Judge Denham described as a trail of tragedy.

Fraught families, separated spouses, lost jobs, and homes under siege were some of the tragedies outlined by Judge Denham.

So too were the roll call of companies being wound up and "stories of millions and billions lost in the ether".

Up too in the ether are small cohorts of judges who, despite their generous salaries and pensions, are also struggling to keep their heads above water.

Some have even been advised that if the Government succeeds -- as it is expected to -- in passing a referendum on pay and targets up to 70pc of their final pension pot, that they will not be able to service their borrowings and honour other financial commitments.

That some judges are experiencing financial difficulties is not in itself a surprise.

Their experience is merely symptomatic of a whole raft of professions -- especially the medical and legal sectors -- who were targeted during the boom by the financial svengalis of the Celtic Tiger.

Professionals earning more than €200,000 a year, of which there were plenty in the legal profession, rushed in to take part in major syndicated property deals including hotels, apartments and commercial property ventures in Ireland and abroad.

They were willing victims.

Many of the schemes were pyramid in nature, where profits from early deals were ploughed back into new ones, a feat underpinned by the belief that property prices would keep on rising.

Common to many such schemes, the golden prize and financial rewards lay in future capital profits.

But when those values plummeted, investors were left nursing huge bills, often having borrowed from banks to enjoy the privilege of joining a canny elite.

It is arguable many people including lawyers and judges who indulged in such investments could never have funded the risks from their current salaries, and so cuts to pay and pensions are hitting them harder than expected.

And many judges who previously earned multiples of what they now earn, already had significant financial commitments before they agreed to become judges.

Security of tenure and pension rights was crucial to many decisions to exchange a lucrative life at the bar for a more staid, if well-paid, life on the bench.

Poor lawyer stories do not sit well, especially as Irish judges earn extraordinarily high salaries compared to their European counterparts.

That Ireland's judges are well paid is beyond dispute.

They earn eight times the national gross annual salary and senior judges here earn twice as much as their counterparts in France, for example.

But there are risks associated with the unprecedented prospect of judges going bust or near bust.

One of these was highlighted by Judge Denham when she said it was "critically important" that judges administer justice and give an independent decision, especially in the area of finance.

The notion of a NAMA-bound judge or one who is struggling to maintain a compliant tax certification could have implications for judges who preside over certain banking and revenue matters.

They are also unable, unlike their colleagues in other countries, to return to private practice or supplement their incomes from other sources such as arbitration.

This will not shield judges from the harsh winds of the Government's plans to reduce their pay and pensions in line with that of senior civil servants, nor should it.

But it would be trite to deny that some are in the eye of the financial storm.

Irish Independent