State Advocate insists he cannot seek damages or prosecute over Vitals collusion findings

State Advocate Chris Soler has insisted that the law gave his office no power to take legal action against Chris Cardona, Konrad Mizzi, Joseph Muscat or seek civil damages from them or anyone else, unless it was instructed to by the government, in the wake of the Court of Appeal’s damning decision on the Vitals/ Steward hospitals concession, last February.

In a heated and occasionally rowdy sitting this morning, Mr. Justice Toni Abela heard the plaintiff’s evidence, in the civil case filed by the Nationalist Party for the recovery of the millions paid from the public coffers to Vitals Global Healthcare (later substituted by Steward Healthcare) in a 2015 deal, which had handed over the running of St Luke’s, Karin Grech and Gozo General hospitals to the company.

That deal was subsequently annulled by a court on the basis of fraud last year, and that judgement was later confirmed on appeal. The Court of Appeal judgement suggested that there had been collusion, as well as fraud.

Soler testified over the course of almost two hours. The State Advocate’s position essentially is that he could only advise the government and had no power to take or order legal action on his own steam.

"If the plaintiffs are thinking that the State Advocate has the powers to act in the way which they are claiming, why did the legislator  explicitly stipulate the circumstances in which the State Advocate can act?” Soler told the court.

The State Advocate’s principal function is to represent the government in cases filed against it, but the position also had  other responsibilities, such as providing legal advice to organs of the State in order to ensure they acted in the public interest. When fulfilling the second role, he said, the State Advocate had free reign to exercise his professional judgement.

“So even if you have a conflicting opinion to that of your client, you must act?” asked the judge. Soler disagreed. “Not the President, not the Speaker, not the government and with due respect not even the court can tell me when and how to act,” he replied.

The law was explicit in saying this, Soler said. “The law itself, the Civil Code, not only gives the State Advocate the right to act, but uses the words ‘through a civil case’ so it clearly directs him.”

The case challenging the hospitals deal had been filed by Adrian Delia’ in 2018, Soler told the court, two years before his appointment as State Advocate in 2020. “The defendant in that case had been the Attorney General and the Prime Minister, not the State Advocate but I had assumed patronage of both the Prime Minister and the Attorney General.”

However, before the creation of the Office of the State Advocate, Soler had been advising them in his capacity as a lawyer, he said.

Lawyer Edward Debono asked the witness what steps his office had taken to safeguard the public interest in that case. “We made several requests for the expunging of inadmissible documents which had been exhibited incorrectly. But most importantly at that time, was that the government had used the controlled step-in rights arising from the contract, which means it assumed the exclusive operational control of the three hospitals.”

Steward had invalidly attempted to terminate the concession, and the emergency arbitrator had upheld the government’s position, he said. “The government had practically evicted them, it kicked them out.”

International arbitration proceedings

The judge asked Soler about the arbitration proceedings, to which Soler replied that he was limited in what he could say.

“It is about claims made by Steward Healthcare for payments from Government to them because of what they claim to be a ‘government non rectifiable event of default’. We are defending these claims and making counterclaims.”

The judge asked what the government’s counterclaim was, essentially. 

“It relates to the failure to invest in medical tourism, the abandonment of the project, non-rectifiable events of default, inability to finance the concession, or provide the guarantees. That they deliberately hampered the step-in procedures,” he replied.

Steward had quantified the damages, but the government was still in the process of doing so, he added, in reply to further questions by the court.

The contract had dispute resolution clauses which meant that the matter had to be referred to arbitration, Soler explained, adding that even if the underlying contract is declared null, the legal doctrine of separability in international arbitration applied.

Debono moved on to another question, asking about the government’s decision not to appeal the Depasquale decision - only Steward had filed an appeal, which it eventually lost.

 “When did you decide that Delia’s requests were correct, because the position you adopted during the arbitration proceedings were the exact same as Delia’s?” needled the lawyer, earning himself a warning from the judge to not attempt to make submissions under the guise of questions.

The lawyer went on, “if the government succumbed to Delia’s argument at first instance, after the appeal judgement which he claimed, explicitly stated that there had been collusion with Vitals/Stewards.”

Soler replied that the judgement explicitly stated that it had only looked at the issue of fraud in order to establish whether Delia had a right to appear as a plaintiff, and not to establish whether there had been collusion or issue instructions to the State Advocate.

After asking the witness to read out a different paragraph of the same judgement, which slammed the failure by “those who have the duty to protect the national interest” to attempt to rescind the contract, Debono asked Soler how he reconciled it with what he had just said.

The judge interrupted the reply. “I am not here to conduct a post mortem of a judgement. I will only point out that this case has been filed against the State Advocate. You need to ask him what he was supposed to do.”

“Were the State Advocate, INDIS [and others]... non-suited? No. So after that judgement, what steps did you take against these people?”

“I don’t have that power,” Soler replied. “I would be acting ultra vires (beyond the scope of his legal powers).” 

“So you didn’t act,” needled Debono.

Soler replied that he hadn’t taken the issue lightly and so, despite being convinced of his legal position, had asked retired judge and former Attorney General Anthony Borg Barthet what he thought about the judicial protest.

“His position was clear and categorical: ‘you absolutely cannot do what is being requested… I read this report and the more I read it, the more I started to realise that I should stick to my convictions.”

Debono pointed out that the court of appeal had stated that the concession was not granted through the fraudulent actions of one party, but through collusion between both parties and had made a damning assessment of it. Was this not enough to make him act, asked the lawyer.

Soler insisted that he could not have taken action. “I was [exercising the function of] a legal consultant. The law specifies what I can do and this is not one of them.”

But Debono quoted from the law, which stated that “in giving legal advice the State Advocate shall shall act in the public interest and shall safeguard the legality of actions of the State.”

Soler replied that he was not being asked about giving legal advice, but to take action against third parties, which he couldn’t.

Soler said that he could not comment on what had been done before his appointment, “but from that day on, nearly four years now, the list of people mentioned in the plaintiff’s first premise there are two people whom I have worked closely with: Robert Abela and Chris Fearne.”

“It emerges that their actions since then, in my opinion, were in good faith and in the national interest. In May 2023, NAO report found that there were circumstances where the PM and Government took legal advice on payment to Steward on contract. I can also state that they show that if there was anyone participating in a collusion, I don’t think that person would act in a way as to annoy Steward…I am amazed to hear it being argued that the Court of Appeal said they acted collusively.”

“And what about others mentioned?” asked Debono. “Did you carry out any investigations into them? 

“I have absolutely no obligation to do so,” replied the witness. “I am not a forensic accountant. I am not obliged to investigate allegations about third parties.”

The judge asked whether the Commissioner of Police had investigated those third parties.

“I am bound by professional secrecy here as he [the Commissioner of Police] is also my client, but I am not aware that he did,” replied the State Advocate.

The judge urged Debono to stick to the issues raised in his application. “At no time are you saying that he did not do his job or failed to do what he should have done.”

Debono disagreed. “We are saying that he didn’t act. We are saying that The State Advocate has the right to act…” 

“Yes. And now the court will comb through the acts of this case and decide whether he should have acted, but whether he acted rightly or wrongly is not the point of this case,” explained the judge.

The lawyers for the defendants loudly clamoured when Debono asked Soler whether the memorandum of understanding with Vitals/Steward had been signed before the Request for Proposals was issued. This emerged from the appeal judgement, was the reply.

“So, if it emerges from the judgement, didn’t you feel an obligation to act against Chris Cardona, Konrad Mizzi and Joseph Muscat?” asked Debono. “I could not take action,” Soler repeated, as lawyer Chris Cilia objected to the question, telling the court that “this is just for the journalists.”

Asked about parliamentary debates involving former minister Owen Bonnici, which had led to the setting up of the Office of the State Advocate, Soler replied that what had emerged from those debates “was that when the offices were divided, the State Advocate was not given powers beyond the old advisory powers previously exercised by the Attorney General.”.

“But he didn’t just say this,” Debono confronted the witness. “He said more. The State Advocate is also the lawyer of the judiciary, the Legislative and the Executive. After the appeal judgement, do you still say you had no right to file even civil proceedings against the highest officials in the country?”

“I can only act when the law gives me a right to, or when approached by legal advice,” Soler repeated.

The judge adjourned the case to April for the defence’s evidence.