Cedric Stephens | The risky nature of government

Minister of Justice Delroy Chuck disclosed during his contribution to the 2024-25 Sectoral Debate in the House of Representatives last week that $530 million was paid as judgment debts in the last financial year.

The payments were for 182 matters. Was this information about simple housekeeping matters, or was it of greater significance? What are judgment debts? Was it a good or a bad thing that judgment debt expenses of $187.5 million per citizen were incurred during 2023-24?

None of the sources that I checked suggested that the minister answered these questions or framed his disclosure in the context that the individual budgeted allocations to one ministry and six government agencies were exceeded in 2023-24 by the judgment debts.

The total amount expended for judgment debts for the period 2016 to 2023 amounted to $5.8 billion. This was more than the individual 2023-24 budget allocations to two ministries and three agencies. Also, $680 million was earmarked to pay judgment debts during the current financial year.

Ghana Web – www.ghanaweb.com – describes a judgment debt as “any sum of money that a court of law orders the losing party to pay the winning party”. In the cases cited by the justice minister the losing party would be the Jamaican Government. The winning parties would be individuals, families, companies, or institutions.

Here are some examples that could lead to judgment debts: if an uninsured government-owned vehicle caused a collision where a court determined that the driver and/or the State was liable for personal injuries and property damage; if a patient at a public hospital filed a malpractice liability claim against its employees/agents; if representatives of the security forces were alleged to have been involved in false arrest and/or malicious prosecution of a citizen.

Similarly, if a vehicle examiner at one of the 14 depots across the island was to crash a vehicle while testing its roadworthiness, their actions could result in a judgment debt for the Government.

A 2015 report of a commission of enquiry into payments from public funds revealed that one of the major causes of judgment debts in Ghana was contractual breaches by government and its agencies. Another was “alleged tortious/statutory breaches committed by public officials in the course of their official duties”.

When judgment debts are paid late, compounding interest charges will be incurred.

In wine-making, the ullage or fill level of the wine barrel can be an important indicator of the kind of care and storage conditions that the wine was kept in. The judgment debt incurred by an administration can be viewed as one measure of how risks are managed.

The running of government ministries, agencies, and departments is inherently risky. The $530 million in judgment debts incurred last year represents only part of the costs.

Jamaica is becoming an increasingly litigious society. On-campus enrolment in the Law Faculty of UWI Mona increased by nearly 15 per cent between years 2012-13 and 2016/17. The University of Technology Jamaica and the University of the Commonwealth Caribbean also offer undergraduate degrees in law.

The influence of American television, cable news, and, recently, the spate of lawsuits initiated by private individuals to protect their workplace and/or constitutional rights about vaccine mandates are among other factors that contribute to the observation that local citizens are more likely now to seek legal remedies to settle disputes than in the past.

Defence counsel Peter Champagnie KC argued on April 26, 2022, in the Jamaica Observer, that “the world has become so much smaller, and persons are now more aware of their rights, and to that extent, they aren’t prepared to just engage the justice system at a first level”. It would be interesting to find out if what this newspaper calls the ‘Traffic Ticket Refund Dilemma’ – that resulted in the Government collecting $2 billion of illegally imposed fines – will be classified as a judgment debt.

These trends are likely to cause an increase in the amounts incurred for judgment debts in future years. In the interests of transparency, good governance, and accountability, more detailed analyses of these global numbers should be undertaken and actions implemented to prevent them from mounting. Any savings that are realised from reducing judgment debts can obviously be deployed in other areas.

Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: aegis@flowja.com or business@gleanerjm.com