Irish Permanent considers it did well to settle its legal differences with former executive chairman Dr Edmund Farrell. In one respect, maybe it did: the former building society has avoided a court battle which could have resulted in contentious cross-examinations of current executive and non-executive directors.

There was the danger that details revealed in court about the direction and management of the former society could have damaged the current standing of the bank. Some of the current directors of Irish Permanent served on the board for a period under Dr Farrell.

The deal may have been a good one for shareholders in terms of the stability of the share price. But the settlement terms do not appear to support the seriousness of the allegations Irish Permanent made about Dr Farrell's use of society funds. And why did it take four years, with the attendant legal and management-time costs, for the parties to reach the agreement that unfolded last week?

The settlement was particularly surprising given Permanent's long-running and adamant avowals that there would be no settlement and its apparent confidence that it could recover the Foxrock property, at the centre of the case, from Dr Farrell.

But in the event Irish Permanent failed to recover the property worth an estimated £2 million. It has to pay its own legal costs of more than £350,000 as well as the opportunity costs of management time spent preparing its case over the last four and a half years.

Dr Farrell has agreed to pay Irish Permanent £150,000 - but only £50,000 of this sum is for immediate payment because Dr Farrell has a five-year time frame in which to pay the £100,000 balance.

Irish Permanent has recovered a condominium in Boston worth about £100,000. And Dr Farrell's pension fund worth an estimated £800,000 is to be released.

The quid pro quo for Irish Permanent is that Dr Farrell has dropped his £4.7 million unfair dismissals claim. Dr Farrell's lawyer said after a settlement was announced that all the transactions mentioned in the proceedings were known by the board of Irish Permanent at the time. That was an interesting point that was possibly crucial to the settlement agreement that emerged.

Sources close to Irish Permanent made much of the legal costs that would have arisen had the case gone the expected 12 weeks in court - an estimated £1.5 million for each side - and the ability of Dr Farrell to pay.

But if Irish Permanent was confident of its case, a house worth about £2 million - less the £260,000 charge held by Bank of Ireland - would have been worth the battle. And the bank could have been awarded its costs.