The State Advocate argued on Tuesday he has no power to take legal action against former ministers Chris Cardona and Konrad Mizzi and ex-premier Joseph Muscat after a court annulled the "fraudulent" privatisation deal for the running of three public hospitals.

Chris Soler was testifying in proceedings before the First Hall, Civil Court in a case in which the Opposition took the State Advocate to court arguing he had to recover the funds in the now defunct hospitals' deal in the public interest. 

Last year Bernard Grech and Nationalist MP Adrian Delia asked the court to order the State Advocate to take action against “present and past government officials involved in the [hospitals privatisation] deal”. 

They followed up that request by calling upon the court to handle the case with urgency since the subject matter was of national interest.

After considering the Opposition’s request and the State Advocate’s objections, the court concluded that it did not see the need for urgency as claimed by the applicants. Although it turned down the Opposition's request for the case to be heard with urgency, it observed that the lawsuit deserved priority.

The action follows up on the landmark judgment delivered in October annulling the contract.

On Wednesday, in testimony that lasted nearly two hours, Soler said the State Advocate’s position was that he could only advise the government and had no power to take or order action on his own steam.

 “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 told the Judge.

He added that the case challenging the hospitals deal had been filed by Delia in 2018 - two years before he was appointed State Advocate in 2020.

The defendant in that case had been the Attorney General and the prime minister, he said, adding that he had assumed patronage of both the PM and the AG.

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

The public interest

Lawyer Edward Debono, appearing for the Nationalist Party, argued that the law allowed the State Advocate to take action if he was ordered to do so by the government. He asked Soler 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, 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.”

When the judge asked Soler about the arbitration proceedings, Soler said he was limited in what he could say: “It is about claims made by Steward for payments from the government because of what they claim to be a ‘government non-rectifiable event of default’. We are defending these claims and making counterclaims.”

He added that the government’s counterclaims were linked 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 and that Steward deliberately hampered the step-in procedures.

Government still to quantify damages claimed from Steward healthcare

Steward had quantified the damages, but the government was still in the process of doing so, he added.

Fielding further questions from Debono, Soler said he had not taken the issue lightly. 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, he asked Soler.

But Soler insisted: “I was [exercising the function of] a legal consultant. The law specifies what I can do, and this is not one of them.”

Debono referred to the law, saying that “in giving legal advice the State Advocate shall act in the public interest and shall safeguard the legality of actions of the State”.

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

Soler added that since his appointment, from the list of people mentioned in the plaintiff’s first premise there were two people whom he has worked closely with: Prime Minister Robert Abela and Chris Fearne.

'Not obliged to investigate allegations about third parties'

“It emerges that their actions since then, in my opinion, were in good faith and in the national interest. In May 2023, a National Audit Office report found that there were circumstances where the PM and the 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 the others?” 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 as [the Commissioner of Police] is also my client, but I am not aware that he did,” Soler said.

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,” added the Judge.

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