The quest by Moriarty tribunal lawyers for a rise in their £1,350-per-day pay rates began in February 2001. It was formally raised by the three senior tribunal barristers, John Coughlan SC, Jerry Healy SC and Jacqueline O'Brien (then a junior counsel but later to become a senior counsel) in a letter to Judge Moriarty the following September, seeking his support for their position. In the letter, they argued that the rates agreed in 1997 were "well below what any of us might have expected to earn in ordinary practice" and that their fees should reflect the "radically changed circumstances" of the tribunal which was running far longer than anyone had anticipated.

Arguing for higher rates than those then being paid to counsel in non-statutory inquiries, the three lawyers claimed that the "only reasonable comparator" was the Saville (Bloody Sunday) inquiry where counsel were paid a daily rate of stg£2,000 for an eight-hour day plus an additional per-hour payment for preparation work.

Moriarty passed on the letter to then attorney general Michael McDowell and to the secretary general of the Department of the Taoiseach Dermot McCarthy. In an accompanying handwritten note to McDowell, supporting his tribunal lawyers, Moriarty said "a mischievous journalist catching sight of the matters raised would not I think find potential copy of the 'legal fat-cats threaten walk-out from £270k pa workplace' genre from a proper reading of its content and tone".

In one of a series of letters to various government officials, Healy wrote to McDowell citing economist Colm McCarthy – later of An Bord Snip Nua fame – whom the tribunal legal team had consulted to examine "the available comparators" to arrive at a reasonable basis for updating their daily rates. Using the 'comparators' with High Court judges, senior politicians and senior civil servants, the letter argued for an increase in the fees to senior counsel of between 35% and 58%, bringing the non-sitting daily rate from £1,350 (€1,715) to between £1,829 (€2,322) and £2,136 (€2,712) or up to £2,294 (€2,913) for sitting days.

Healy also said they had been "endeavouring to have these fees adjusted for the previous year" and that therefore any adjustment should be backdated to that period.

While Healy claimed in a subsequent letter to the Department of the Taosieach that McDowell, in a meeting before Christmas 2001, had expressed sympathy with their request for a fee hike, this is sharply contradicted in an internal note between Department of the Taoiseach officials in February, which states that McDowell had made it clear to the lawyers that he "was not going to increase their fees".

The issue still had not been resolved by March 2002 when a further, somewhat tetchy, letter was dispatched from the tribunal legal team to Dermot McCarthy, the most senior civil servant in the country. The letter described the lack of progress as "extremely disappointing" and said the "intolerable delay" had affected the "actual operation of the work of this tribunal".

"Time and time again," the letter continued, "we have alerted both your office and the AG to the risk that the work of the tribunal could be seriously retarded due to the failure of the authorities to respond to what we believe are reasonable requests for a review of the fees". It said the tribunal had kept costs low by having a very small staff, "on this score", it was "utterly distinguishable from every other inquiry", claiming: "We have now become the victims of our own success."

It continued that the tribunal's junior counsel, O'Brien, had indicated "she can no longer provide the tribunal with an exclusive commitment and has intimated a desire to return to her practice."

This was followed, five days later, by a handwritten letter from Judge Moriarty to McCarthy asking if he would meet with Jerry Healy to "find some way forward in the matters raised which especially with regard to [then junior counsel] Jackie O'Brien, BL, are very worrying".

Following a meeting between McCarthy and Healy, McCarthy wrote to Taoiseach Bertie Ahern, just prior to the general election campaign of 2002, stating that Healy had "indicated that there is the prospect of some immediate departures from the team which could slow its progress and ultimately result in a very significantly higher cost".

A day later, Healy wrote to McCarthy complaining that McCarthy was supposed to come back to him by the previous day. "Late yesterday afternoon I left a message with your secretary but I have heard nothing since." However, by 14 June 2002, McCarthy was able to write to Healy to inform him that revised fees had been agreed, which would increase the rate for senior counsel to €2,500 a day, with €1,500 for junior counsel. Research counsel would be paid €600 per day, while documentary juniors would get €500 a day.

But that wasn't the end of the matter. Healy wrote to McCarthy three days later raising two problems. Firstly, the rate for junior counsel was "unacceptable in the case of Jacqueline O'Brien" he noted that the AG's office were "favourable" to the proposition that O'Brien get equivalent to 80% of the daily rate of the senior counsel. Secondly, the counsel wanted the proposed hikes to be backdated to February 2001, when the issue was first raised.

Dermot McCarthy responded, agreeing to the issue relating to Jacqueline O'Brien but holding the line that the general increase in fees would only begin on 24 May 2002. This prompted an angry letter from Healy stating that it was "a breach of the trust we had not to have informed me prior to the [general] election [of May, 2002] that the review would not operate from the commencement of the protracted dealings between the tribunal legal team and your department".

In July, Judge Moriarty also wrote to McCarthy warning: "I am faced with a situation of an acute crisis of confidence on the part of my team" and asking to meet with him.

However, at this stage the Department of the Taoiseach and the AG's office discovered that there had been "an error of transcription" and the revised daily fees should have been €2,250 and not €2,500 as notified to the tribunal.

The advice from the office of the AG, which McDowell had departed following his return to the Dáil, was that the tribunal team should be told that the €2,500 rate was in fact notified in error but that it would be inappropriate to withdraw the higher rate and approval should be given for its payment as "an exceptional measure" with effect from 24 May 2002.

This did not go down well with the Department of Finance who saw "no case for paying a higher rate" and regarded the issue of the fee hike being paid retrospectively as irrelevant. However, having regard to the advice of the AG, it agreed to the €2,500 rate "on a strictly personal and confidential basis" with the warning that the rate "will not be subject to further upward review".

The decision to pay €2500 a day "as an exceptional measure" from 24 May 2002 was communicated to the tribunal team adding there "is no further adjustment which can be made". This was accepted by the tribunal team.