Justice minister Dermot Ahern (left) and chief justice John L Murray: The courts lost €40m in investments last year

The Courts Service lost €40m last year investing funds held on behalf of wards of the court, minors and parties to court proceedings. The service attributes the loss to the subprime credit crisis and a turbulent stock market.

The Courts Service holds over €1bn in assets derived from lodgements made after court orders or in compliance with legislative requirements.

The Office of the Accountant of the Courts of Justice, which manages these assets, invested €952m in cash, bonds and equities in 2008. The funds lost an average of 4.23%, or €40.26m, for the year ending 30 September 2008.

Cash deposits grew modestly by 2.03% and 0.66%. However, the fund's investment performance was badly affected by a 17.04% loss in its growth fund, a 12.27% loss in its balanced fund and a 6.83% loss in its bond-plus fund. While the report points out that the service took in more money than it disbursed last year – €86m – this was offset by "a net decrease, including unrealised losses of €88m in court funds from investment activities of €75m".

The service blames economic conditions for the losses but says invest­ments overall are well ahead of their position when the funds were established in December 2003.

"Investment performance for the year for all funds was adversely affected by the subprime credit crisis and turbulent financial markets. The reduction in the value of court funds reported in the financial statements for the period ended 30 September 2008 is based on the market-to-market value of the assets held and has not materialised in a realised loss," it states.