Mr. Ciarán Breen:

There is no doubt that the cost of operating the clinical indemnity scheme which indemnifies all clinical negligence events is increasing sharply. I will say two things about this. In terms of international comparisons, because it has only been in place since 2002, our scheme is regarded actuarially as immature. It was always going to develop along a certain trajectory which is very much within our actuarial estimations. Having said that, there are a number of complications which arise largely from the fact that in the Gill Russell case the Court of Appeal confirmed the High Court's decision on reducing the discount rate, the rate used in calculating special damages related to the cost of future care and so on. It grossly increased the value of awards in catastrophic injury cases, in particular.

We have a system which we have tried to operate for families in which we operate what we call periodic payment orders. They are not underpinned by legislation. We wanted to give families certainty that they would receive the exact amount and that they would never have to worry about the risk of investment and so on. We did this on an interim basis in the hope periodic payment order legislation would eventually come through. I understand it will come through in the next while. We were settling cases on the basis of interim payments. They returned to court every two, three or five years, depending on the system we were operating. Unfortunately, what has happened is that, understandably, in very many cases, parents and families have run out of patience with the system. They do not like coming back to court on return dates. They do not like the fact that their children have to be re-examined. We understand this and sympathise with them. In many cases, people have opted for a lump sum rather than continuing periodic payments, but this complicates litigation costs. To give the committee an idea, this year we expect to spend somewhere in the region of €220 million on the clinical indemnity scheme. Next year we think that figure will jump sharply and probably exceed €300 million. There are certain volatilities and assumptions in our actuarial model about this. The ingredients are whether we will have the pre-action protocols and the periodic payment order legislation in place. If they were to be put in place, it would have a dramatic effect on how we might reduce the cost.