Mr. Ciaran Breen:

I thank the Chairman and the committee members for the opportunity to address them on the challenges facing the medical profession and consultants in particular arising out of the high cost of professional medical indemnity. By way of introduction, the NTMA is designated as the State Claims Agency, SCA, when performing the claims management and risk management functions delegated to it under the National Treasury Management Agency (Amendment) Act 2000. The SCA's principal objectives are to ensure that the State's liabilities in respect of personal injury and property damage claims and the expenses of the SCA in respect of their management are contained at the lowest achievable level and to implement targeted personal injury and property damage risk work programmes to mitigate litigation risk in State authorities and health care enterprises to reduce the cost of future litigation against the State. The SCA's remit covers personal injury and third-party property damage risks and claims relating to certain State authorities, including the State itself, Ministers, the Attorney General, health care enterprises, the Commissioner of An Garda Síochána, prison governors, community and comprehensive schools and various bodies.

In October 2013, the Government delegated to the SCA the management of personal injury claims concerning the ingestion of the medicinal products Celvapan and Pandemrix. In April 2014, the SCA's remit was further extended with the delegation to it by Government of the management of personal injury and third-party property damage claims in respect of an additional 61 public bodies, bringing the total number with the SCA's remit from 56 to 117.

We have 2,840 current clinical claims under management. The estimated contingent liability in respect of those claims is €1.159 billion. Clinical claims are managed under a number of separate schemes by the SCA. Under the main scheme, the clinical indemnity scheme, the State has assumed responsibility for the indemnification and management of clinical negligence claims arising from the diagnosis, treatment and care of patients in public health care enterprises. The SCA resolved 487 clinical claims during 2014 at a cost of €70 million. The SCA achieved significant savings in the management of personal injury claims in 2014. An independent actuarial assessment projected that €202 million would be required during the year to cover both the cost of resolving claims and managing ongoing active claims. The net cost, taking account of successful recoveries from third parties, was €104.6 million, which was a saving of roughly 48% compared with the actuarial projection. We received 609 new clinical claims in 2014. Maternity services related claims, which are largely obstetric claims, accounted for 23% of all new claims and 61% of the estimated liability of all new claims due to the high values associated with these types of claims.

On the number of claims received by specialty and cost and the cost of claims resolved, the average cost of personal injury clinical claims resolved in 2014, which includes awards, settlements and related legal and other costs, was on average €140,000 compared with €67,000 in 2009. We point out that this increase is mainly due to the lag effect of 2,500 consultants whose claims were previously handled by medical defence organisations joining the clinical indemnity scheme from February 2004. Inevitably, this has resulted in a significant increase in the number and severity of claims. In maternity services cases, particularly those involving brain injury to infants, there is typically a period of five to seven years between the date of the adverse event which gives rise to a claim and the date of resolution of the claim. An additional factor in the higher average cost per claim was the High Court decision in a 2009 precedent case to increase by 38.5% the level of general damages in catastrophic injuries cases from €325,000 to €450,000. Legal fee costs have increased in conjunction with award settlement costs. The table with my presentation sets out the detail in the years 2008 to 2014 of all the claims that have been resolved.

Under the clinical indemnity scheme, the SCA has responsibility for indemnifying consultants in full-time and off-site private practice, by reference to the caps arrangements, in respect of clinical claims which exceed certain limits or caps. The caps arrangements and their cost to date to the clinical indemnity scheme are more fully described in the submission we gave with this opening address.