Oireachtas Joint and Select Committees
Wednesday, 20 October 2021
Joint Oireachtas Committee on Agriculture, Food and the Marine
General Scheme of the Veterinary Practice (Amendment) Bill 2021: Discussion (Resumed)
Today the committee is continuing its detailed scrutiny of the veterinary practice (amendment) Bill 2021. In the first session of today's meeting we will have representatives from the Competition and Consumer Protection Commission. I welcome Mr. Brian McHugh and Mr. Patrick Kenny, who are joining us remotely. They will be given ten minutes to make an opening statement before we go into a question and answers session.
Before we begin, I have an important notice on parliamentary privilege. Witnesses are protected by absolute privilege in respect of the evidence they are to give to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter in these proceedings is to be given. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.
Participants in the meeting who are outside the parliamentary precincts are asked to note that the constitutional protections afforded to those participants within the parliamentary precincts may not extend to them. There are no clear guidelines on whether or the extent to which absolute privilege covers such participation.
I call on Mr. McHugh to make his opening statement.
Mr. Brian McHugh:
I thank the committee for the opportunity to speak today and to provide our views on the Veterinary Practice (Amendment) Bill 2021. I am a member of the Competition and Consumer Protection Commission, CCPC, and I am joined by Mr. Patrick Kenny, another member of the CCPC.
The CCPC has a statutory function under the Competition and Consumer Protection Act 2014 to promote competition and promote and protect the interests and welfare of consumers. In the pursuit of those functions, we enforce competition and consumer protection law. We also provide advice to the Government and other public bodies on issues relating to competition and consumer welfare.
The CCPC is concerned that the provisions contained in this Bill would be disproportionate and would, in the CCPC's view, lead to a restriction of competition in the market for veterinary services with negative consequences for consumers, including farmers and the wider agricultural sector. Any perceived benefits of the proposed legislation are, in our view, unquantified and unclear. The CCPC is concerned also about potential unintended consequences of the proposed legislation, should it be enacted.
Directive 2006/123/EC, commonly referred to as the services directive, is intended to provide a level playing field and eliminate barriers to the provision of services by businesses and professionals across the member states of the European Union. The services directive requires that any legal restrictions on the exercise of a service are permissible only where they comply with the principles of non-discrimination, necessity and proportionality. Any restrictions on the legal form that veterinary practices take should be justified on a clear evidential basis of protecting the public from detriment, including harm to the animals under the care of veterinary practitioners. The CCPC is of the view that there is a real risk that an outright ban on corporate ownership could be successfully challenged as being disproportionate. The proposed legislation could be at odds with efforts to ensure Ireland remains in compliance with EU law and continues to be a welcoming location for new businesses and investment by service providers.
The CCPC believes the committee should consider the adverse implications of the legislation on existing corporate-owned practices in the State as well as their employees and customers. As the members of the committee are aware, the Constitution extends certain rights, including property rights, which may be affected by the passage of the Bill into law. The role of interpreting the Constitution falls to the courts. As such, I will focus our comments in the remainder of this statement to the CCPC's views on the impact of the Bill on competition and the disproportionality of introducing a ban on corporate ownership. It is the CCPC's view that enhanced regulation could instead be employed to ensure veterinary practices continue to provide a high standard of care, irrespective of ownership structure.
Competition policy in its broadest sense involves the enforcement of competition law, including rules against anticompetitive practices, merger rules and, in addition, public policy measures that enable and support competition in markets. It may be of assistance to the committee if I briefly discuss the importance of the public policy aspects of competition policy to the functioning of the economy. These aspects of the CCPC's remit focus on the broader environment of legislation, regulation and administrative practices.
Public policy can give rise to restrictions on competition in a number of ways. The CCPC recognises that there can be legitimate public policy objectives which, when balanced against those of competition, can lead to less competition in a market but which promote the public good in a broader sense. For example, the high level of qualifications necessary to practise medicine and veterinary medicine are barriers to entry but the vital importance of protecting human and animal health justify those requirements.
Some restrictions, however, are less open to objective justification. The CCPC and its predecessor agency, the Competition Authority, have engaged with government and other stakeholders in order to reduce such restrictions over the past number of decades through our advocacy activity and, in particular, through our market studies. Examples include our recommendations and advocacy activity to open the market for legal services to greater competition and to reduce restrictions on the availability of GP services in Ireland.
The committee may be aware that the Competition Authority published a study of the veterinarian market in 2008. That study found a number of unnecessary restrictions on competition between vets. It made a number of recommendations intended to address those restrictions, including removing restrictions on advertising by vets. The Competition Authority also examined ways of ensuring an adequate supply of veterinary services in the future, which is of particular importance for the agricultural sector. We note the increased number of vets in practice in Ireland since the publication of the study.
The CCPC understands that the intent of the Bill is to prohibit corporate ownership of veterinary practices by non-vets.
However, the CCPC believes that a variety of types of veterinary practices, including incorporated practices, should have a role to play in this sector. This was a specific recommendation in the competition authority’s study as it found that the benefits of corporate ownership included improved access to capital for investment and the greater application of non-veterinary business skills. There are further potential benefits, including cost savings, the ability to provide locations and opening hours that are more convenient for many consumers and flexible working arrangements. The current Irish veterinary sector is similar to many other European countries, in that there are a variety of types of ownership of practices. Veterinarians may work as sole traders, in partnerships, in incorporated practices and as employees. Survey results published by the Federation of Veterinarians of Europe in 2018 indicate that the Irish veterinary sector is not unusual in having a range of ownership models. Small practices predominate in Europe with almost half of veterinarians being sole traders. In contrast, Ireland is home to a higher than average number of medium-sized and larger practices with approximately 40% being incorporated in some form. It would appear that irrespective of practice type, vets continue to deliver a variety of vital services across European countries.
The CCPC’s view is that the Veterinary Practice Act 2005 could instead be amended to provide a legal basis on which the Veterinary Council of Ireland, VCI, can regulate the operation of incorporated practices. As members will be aware, veterinary practitioners are obliged by provisions in the Veterinary Practice Act, as well as the VCI’s code of conduct, as to how they perform their functions in respect of their clients and animals under care. As set out in the code of conduct the veterinarian’s duty to his or her clients includes the provision of 24-hour emergency cover for the care of animals that during normal working hours could be considered as being under the care of the veterinary practice. We understand that the intention of the Bill is in part to ensure that the availability of critical veterinary services, such as the provision of 24-hour care, is not reduced due to such services being incompatible with the priorities of management in a corporate owned practice. However such a ban would appear to be unique in Europe and has not been applied in other similar professions such as GPs, pharmacies and dentists.
It would be difficult to predict the effects of such a drastic measure on the current veterinary sector and we have not seen evidence that this analysis has been done. The CCPC instead suggests that proportionate regulation could provide reassurance for consumers including those in the agricultural sectors, that veterinarians employed by corporate owned practices would continue to deliver such services as part of a regulated obligation on the practice. The CCPC is aware for example, that the Pharmacy Act 2007, and subsequent regulations made under that Act, impose obligations on the owners of retail pharmacies, including where that pharmacy owner is a corporate body. This approach ensures the benefits of corporate ownership can be realised for pharmacies, while maintaining a high standard of clinical care and compliance with the law.
The CCPC considers that there is an opportunity to reassess how regulation of veterinary services can remain responsive to changes in the market, while ensuring that restrictions on entry into that market are proportionate. To that end we suggest that consideration be given to engagement with the VCI and the wider veterinary sector to establish how regulation can be developed, while ensuring that the market remains open to new entry and innovation and continues to protect the interests of consumers and animals.
I thank the commission for its submission on this proposed legislation. The commission has made submissions on similar legislation in the past and there are some inconsistencies in what we heard today with what the commission said on previous occasions in regard to legislation. I will point to a couple of law points. One relates to competition law of the European Court of Justice, ECJ, which states that the ECJ has held that competitive restrictions resulting from acts of professionally regulated bodies do not fall within the scope of EU competition law where such restrictions are necessary and proportionate to the regulation of a profession. This amending legislation has three main purposes. The first is to prevent laypersons, non-professional corporates from illegally practising veterinary medicine through the purchase and operation of veterinary practices in Ireland. The second is to ensure that the practice of veterinary medicine remains within the regulatory compass of the Veterinary Council of Ireland as the VCI has no regulatory control over lay operators. The third and most important purpose is to protect the consumer, animal health and welfare and public health. That is paramount.
Allowing an unregistered person to own a veterinary practice would mean an unregistered person or body corporate would enjoy a level of control over substantive practice-related decisions, for example, the policy of the veterinary practice including practice protocols, the mix of work accepted and performed in the practice, the materials employed by practitioners in the practice, and the sale and supply of prescription drugs in direct contravention of the animal remedies regulations, section 28(4) together with Schedule 1, Part 1, paragraphs 1, 2 and 3. In lay terms what that means is that we have lay people purchasing and having the control of drugs.
This committee has spent much time in the recent past discussing the availability of veterinary medicines and the way non-prescription veterinary medicines will be dealt with in the future. There has been much concern about resistance to drugs and the dangers to human health therein. Here we are now going to allow non-professional people to have the purchase and sale of those drugs under their authority, rather than under the authority of qualified professionals? As an example, when a corporate body took over a practice in Northern Ireland, the veterinarian working there was denied access to the drugs that were in that practice when it was taken over. He has made complaints about the fact that those drugs were then outside of his control. They are some fundamental points. Lay ownership of a veterinary practice will not be able to guarantee a 24-hour service because VCI's code of conduct requires a veterinary practitioner to ensure arrangements are made for 24-hour on-call emergency cover. It is not binding on a non-registered person or body corporate to do that. That is another point in regard to animal welfare and availability of the service.
We have seen corporates grow in other countries. Unfortunately, the level of service and the cost to the consumer, rural and urban, has increased dramatically as a result. Corporates will not pick a practice in Connemara or on a peninsula. They will target large urban small animal practices in intensive farming areas. Mr. McHugh mentioned the availability of veterinarians. I know of a large practice that was recently taken over where 11 veterinarians were employed, three of whom partners in the company. They were part of the purchase and benefited from the sale of the practice, but the other eight veterinarians working there saw their career progression meeting a stone wall. To get a number of veterinarians into large animal practice is a challenge at the moment. If we allow corporates to gain a stronghold however, the career progression for those young veterinarians will be severely restricted. It will become even harder to entice veterinarians coming out of college to go into large animal practices.
If Mr. McHugh wants examples of other European countries protecting professions like this we can look to Germany. I will read from an article, which states:
On 19 May 2009 the European Court of Justice (ECJ) ... confirmed that Germany can have national legislation which prevents non-pharmacists from owning and operating pharmacies ... [the joined cases and case numbers are immaterial here]. This effectively is a ban ... on the outside ownership of pharmacies, and no pharmacy chains will be allowed to operate.
According to German law, the principle of the owner-run pharmacy applies: thus only pharmacists are allowed to own and run pharmacies. There is a ban on outside ownership, in order to thus ensure the job-related independence of the pharmacist.
I believe one can easily correlate that with what we are trying to do with this legislation as regards the veterinary profession. Therefore, it is clear. The article goes on to state:
The ECJ came to the conclusion that the German ban on outside ownership is valid. Although the ban could be seen as an intervention in the European freedom of establishment, this was balanced against the protection of health. Each Member State can decide which scope of protection it wants to achieve for the population. For this reason, a Member State is entitled to exclude non-pharmacists from owning and running a pharmacy if it believes that these persons do not have the necessary job-related independence and therefore constitute a risk for the public health.
I spoke to a veterinarian who rang me because he knows I am sponsoring this legislation. His practice where he worked was recently bought by a corporate entity; in other words, by laypeople. He was told that part of his remit for the following year would be to increase the sale of drugs by 10%. We have people coming in whose aim is to increase their bottom line. They are not coming from a profession that takes an ethical oath as regards animal welfare when they qualify.
While I welcome Mr. McHugh's observations about competition, I feel the opposite is the case in allowing the change in legislation, which from 2005 to 2015 was supported by the Competition Authority at the time. The Veterinary Council of Ireland's interpretation of the Act was to prohibit the sale of veterinary practices only to veterinarians and to restrict the ownership to veterinarians. The interpretation of that legislation was changed in 2017. This committee had a number of committee meetings around that time. We will be talking to the Veterinary Council of Ireland at a later date. This amendment to this legislation, however, was borne out of those meetings when the committee at the time, of which the Chairman, Senator Daly and I are probably the only three surviving members, was extremely unhappy with the explanations and reasons that were given to us for the change of interpretation of the legislation. I have seen advice from the present Attorney General, however, who gave advice to the veterinary union at the time, which very strongly argues that the interpretation taken at that time is not in accordance with the legislation. This amendment is to make that crystal clear and to reaffirm the previous Veterinary Council interpretation of the Veterinary Practice Bill.
In conclusion, there are clear precedents in other European countries for this kind of restriction. It is very much within EU law. It is up to each member state if it feels that it is warranted from a public health point of view. At the end of the day, public health is the most paramount thing that we as legislators must protect. It is clear that what is happening at the moment is in clear breach of the animal remedies regulations, which is under the Department of Agriculture, Food and the Marine. It is very clear that allowing laypersons to have control of the purchase of prescribed drugs cannot be in accordance with that regulation. There is, therefore, urgency on us to act.
We have also seen cases in France where veterinary practices have been delisted because the French authorities felt what was happening there was not in accordance with public good. The fact that we have corporates established here does not make the Veterinary Council's interpretation of this legislation correct. As I said, veterinary practices that were owned by corporates have been delisted in France. There is clear precedent for legislation, therefore, as per the amendment to the Bill that I am sponsoring.
While I take on board Mr. McHugh's concerns as regards competition, I feel they are unfounded and that the service we have had provided to us for generations by veterinary practices has worked extremely well for us and for animal welfare. Whether it is local shows or whatever, veterinary practitioners have never been found wanting in providing voluntary services in their community. We have a model that has worked extremely well in providing an excellent service to the consumer at a reasonable cost.
I am very strongly of the view that this amendment to the Bill will ensure that lasts for further generations. From the point of view of the consumer and the young veterinarian coming into practice and, as I said, most importantly of all, from the public health and animal welfare point of view, it is absolutely essential that the practice of veterinary medicine is kept under the control of veterinarians. As I said, we see precedence in other European countries and it is clear that this country, under EU law and competition law, has the remit to amend this legislation.
Mr. Brian McHugh:
I would certainly agree with a couple of things. As part of the opening statement, I set out that competition restrictions can be allowed where they are necessary and where they are proportionate. I think it would be very important to set out what the problems are here, which the Deputy has done for a few areas, and then what the potential solutions are and whether they are necessary or proportionate. As I mentioned, we do not have these arrangements where such corporate ownership is banned for GPs or pharmacies in Ireland. It is not, therefore, deemed necessary or proportionate in those areas.
I will not get into a detailed discussion on the points of law. I am not a lawyer. What I would say is that there are real risks in terms of this legislation. There are a number of cases where similar restrictions have been found to be in breach of European law. I would suggest that it would be very important that this legislation is subject to legal scrutiny to understand what the risks are in terms of that law.
In addition, there may well be constitutional issues in terms of the impact this has on corporates that are currently in place in Ireland, which is very difficult to predict. As I understand, it would mean some owners of businesses would be criminalised and would need to take actions to divest themselves of that business, which may be a very complicated and painful process for what may be relatively small or even family-run veterinary practices. Legal issues would, therefore, have to be very carefully considered.
In terms of the issues identified by the Deputy, similar issues will come up in terms of GPs and pharmacies, corporates and the individuals responsible for medicines. Those should be very carefully considered, therefore, but I think the right way to do that is through the regulator, as has been done in other sectors.
I thank the CCPC for being here today and for its submission and opening statement.
The CCPC is the Competition and Consumer Protection Commission and I note that "consumer" is mentioned in the opening paragraph of the submission to outline the purpose of the organisation, but from that point on, the consumer is not mentioned again in the CCPC's reasons for objecting to this legislation. Am I correct that the commission's concerns are primarily based on the competition aspect of its role rather than the consumer protection aspect?
Mr. Brian McHugh:
No. We view them as intrinsically linked. We provide advice to the Government and public bodies on issues around competition and consumer welfare. When stringent restrictions are introduced in a market preventing consumers from having choice, it is not good for consumers in the long run. It means that there will be less competition in the market and fewer places for consumers to go, and it will ultimately be consumers who suffer. We come at this from the point of view of consumers and consumer welfare.
I am looking at the headings in the submission: "Unintended consequences"; "Competition and the Veterinary Practice (Amendment) Bill 2021"; "Irish Veterinary Sector"; and "Enhanced obligations on Veterinary Practices". Which of these relate to the consumer as opposed to the competition aspect of the CCPC's role?
Mr. Brian McHugh:
The principal issue is having competition and the risks of restrictions to competition. We have spoken about the impact on consumers, including the agricultural sector as a consumer of veterinary practices. That is set out in the submission. As in any market where there are restrictions, the ultimate impact is on consumers. They are the ones who tend to suffer from a lack of competition, a lack of new entry and a lack of innovation because of, for example, fewer services and higher prices. That is why we have been given the remit by the Oireachtas to make presentations in respect of legislation and identify where there are competition issues that impact on consumer welfare. To a large degree, we are here today for the benefit of the consumer and to stand up and be the voice of the consumer where legislation like this risks harming consumers in the long run.
In this instance and where our committee's remit is concerned, the consumer is the farmer. A number of parts of the country are not as well serviced by vets as others. Will Mr. McHugh point us towards the recommendations that the CCPC has brought to the Government to address these deficiencies in veterinary services?
Mr. Brian McHugh:
Over the past ten or 15 years, our understanding is that the number of vets has been increasing, which is welcome. This increase has coincided with an increase in the number of corporates in the sector. From that point of view, the increase in the number of corporates has not damaged the supply of vets. The increased supply of vets is welcome, but that is not to say that more work could not be done in the area.
That is fine. Mr. McHugh will know that this legislation would essentially revert the situation to an interpretation of the Veterinary Council that was in place from 2005 to 2018. The increases he referenced happened during a time the criterion was that a non-vet could not own a practice. In that time, did the CCPC make submissions or recommendations to the Veterinary Council or the Government to the effect that that interpretation should be changed?
Mr. Brian McHugh:
My understanding is that the Bill will ban a veterinary practice from being owned by non-vets. Veterinary practices in Ireland that currently have some element of ownership by non-vets will be banned. A number of those are in place. That is my understanding of the impact of this Bill.
Mr. Brian McHugh:
Yes, but a number of veterinary practices are in place where non-vets have a beneficial ownership. This Bill will criminalise those people and companies and create a situation where there is significant disruption in the industry. I have not seen an analysis of exactly how many veterinary practices will be so disrupted by the legislation. I have not seen analysis-----
My understanding is that this Bill would not be retrospectively applied. It would apply to new entrants to the market as opposed to existing practices. Would that change the CCPC's testimony to the committee?
Mr. Brian McHugh:
No. That may be a factor in the potential impact, but in terms of having a market that is open to choice for the type of entity that decides to enter that market as it has done in other markets, our view is that consumers should have that choice. If vets want to enter partnerships, they should be free to do so. If they want to operate as stand-alone sole traders, they should be free to do so. If a corporate wants to invest in a practice, it should be free to do so. We have seen that in a number of markets. As set out in our submission, it brings many benefits. If consumers, including farmers, do not want the service provided by those corporate entities, they will not use those particular practices. If they get a better service, quality or price elsewhere, that is where they will go. That fundamental point about the impact of this legislation remains, not just for the veterinary sector, but also other sectors in Ireland. The CCPC has had an issue with vested interests. Where walls are built around professions or market sectors, it can have a damaging effect on that market from the point of view of consumers. This is a principle that we feel strongly-----
Excuse me for interrupting, but Mr. McHugh just indicated that, from 2008 to 2018, the number of vets increased and the service improved.
During that time, the interpretation of the legislation applied by the Veterinary Council of Ireland essentially enacted the legislation before us. We are looking at international evidence, particularly from our closest neighbours in Britain, where the free-for-all model Mr. McHugh advocates has been to the detriment of the consumer. How can the CCPC say, as a consumer protection authority, that a scenario that was working well for the consumer should be changed to a scenario that we know has been detrimental to the consumer in other jurisdictions?
Mr. Brian McHugh:
I am not aware of any other country in the European Union that has this ban on veterinary practices in place. This proposed legislation would be unique in Europe. It also raises legal issues, which we have discussed, in terms of the services directive. A number of corporates, as we understand it, have entered the market in Ireland in recent years and they are currently players in the veterinary sector. We have not seen evidence that that has harmed consumers in a significant way that would require this significant legislation to be brought in. We are not saying there are no issues or that particular corporate structures are the right answer. We are saying the markets should be open to choice for consumers. Where there are issues, and there may well be, the regulator should look at those and come up with proportionate solutions.
Mr. McHugh has outlined a number of solutions. He stated: "It is the CPCC's view that enhanced legislation could instead be employed to ensure veterinary practices continue to provide a high standard". He also stated: "The CCPC’s view is that the Veterinary Practice Act 2005 could instead be amended to provide a legal basis on which the Veterinary Council of Ireland can regulate the operation of incorporated practices." He indicated the commission was aware that "the Pharmacy Act 2007, and subsequent regulations made under that Act, impose obligations on the owners of retail pharmacies". He also stated that this approach might be warranted. When was the last time the CCPC advised government to pursue any of those three options?
Mr. Brian McHugh:
We have had a position in relation to the veterinary sector that corporate entities should be allowed to enter the market. That has been our position and our advice to government. In relation to the issues raised in this legislation, we are now, as part of the process and as part of our remit----
I am asking about before the legislation came on the table. Mr. McHugh outlined three areas where the issue could be addressed. When was the last time the CCPC advised government using any of those three scenarios?
Mr. Brian McHugh:
As I said, we have not seen issues raised before in the veterinary sector, for example, through complaints, that were of such significance as to suggest we needed to intervene in the market or that there was some big problem, so we have not advised government about any significant problem that needed to be addressed. However, seeing this legislation and recognising that there may be issues in the market, this is our proposal which we think is proportionate, can address the issues that may be in the market and is the right route to dealing with them, rather than the significant and draconian legislation we have here.
I do not know that "draconian" is an appropriate term but on the basis of the CCPC's evidence, submission and interventions in other areas relating to farmers, I think one of the C's in the authority's title should be changed to refer to a corporate protection authority. It appears to me the CCPC always goes to great lengths to protect multinational corporations at the behest of vested interests and to the potential detriment of the people who should be protected in this, namely, consumers, farmers and those living in rural communities. If we are to take international evidence, they could lose significantly as a result of this legislation. I thank the witnesses for being here.
I thank the representatives of the CCPC for being here. Deputy Cahill and the previous speaker have covered many of the areas of interest for me with regard to the proposed amendment to legislation and the opinion of the CCPC. I will seek clarification on a few points, ask a few questions and make an observation. Would I be correct in saying that competition law and the CCPC's opinion are superseded or trumped in every case where protection of health, service provision or public interest is at stake? If Deputy Cahill is correct and we end up with no veterinary services in rural Ireland for large animals and the agricultural sector, would the necessity to provide same supersede anything the witnesses have told us or any competition laws? Can the witnesses clarify that?
The next issue follows on from Deputy Carthy's conclusion. If the status quowere to remain, as the CCPC wishes, the current opinion of the VCI were to stay in place and the proposed legislation were not introduced, there is every chance that we could end up with a monopoly or cartels within the Irish veterinary service. I thought the CCPC's role was to protect the consumer from such but I get a different impression from the submission today and the interaction with the two previous speakers. I would go so far as to agree again with Deputy Carthy - it is becoming a habit - that the CCPC seems to have more interest in protecting corporates than the consumer. We are teasing this out so I want the witnesses to come back to me on this, but the CCPC's stance will, in my opinion, lead to a monopoly and cartel in the industry. There is a strong suggestion of such in other areas which the CCPC has been approached to deal with. How, if the status quoremains, will the CCPC help to avoid that? If it happens, how will it deal with it?
In a similar vein, what if animal drug manufacturers are among the corporates that come in and buy up a number of veterinary practices, amalgamate them and give a directive to their vets, who are supposed to be independent, that they can only prescribe or sell the drugs of the parent company, which is how corporations work? This would be big business for them. How would that pan out, as Deputy Cahill asked, in an era where we are all conscious of microbial resistance? It is part of World Health Organization and One Health policy. That would affect end consumers and farmers. If we do not take action now, how does the CCPC propose we deal with a scenario like that? That would be evident in animal drug manufacturers setting up large veterinary practices by taking over smaller ones or companies whose main interest would be in animal health insurance taking over a number of veterinary practices, concentrating on the small domestic animal, dropping the large animal and the agricultural sector and leaving a void in rural Ireland. Their main emphasis at point of contact, that is, the reception, would be sale of animal health insurance as opposed to the service they provide. Do the witnesses not see major problems with that down the line? Would it not be more prudent, as Deputy Cahill is suggesting, to close the door before the horse - pardon the pun - has bolted?
Mr. Brian McHugh:
I thank the Senator. I will take a few of those issues. On competition law, the issue here, which we highlighted in the opening statement, was around the services directive and the ability of services in Europe to trade across Europe without restrictions in place.
That is not a competition law issue, but a wider issue linked to the European Single Market whereby entities have the right to trade and invest across that market, and obviously Irish companies and farmers have benefitted a great deal from the Single Market. That is the issue. As we have said, and we are agreed to some extent, restrictions can be in place where they are necessary and proportionate. The issue today is that this has not been necessary, as far as we know, in the veterinary sector in any other European country. It has not been necessary in other sectors in Ireland, such as general practitioners, dentists and pharmacies. Many of the issues the Senator raised, which are very real and are issues we would be interested in, would be very similar in those sectors, and the solutions that have been found there are from a regulatory perspective. That is what we would go back to and suggest. These very real issues should be looked at, in terms what is necessary and proportionate, from a regulatory perspective where there is a regulator in place. Where there are potential risks with regard to drugs and how they are prescribed, that is something that could be looked at in the context of what rules and regulations are put in place on those practices and on those vets in respect of prescriptions and making sure that consumers and farmers have the ability to shop around wherever they wish for their drugs when they have been prescribed by a vet. They are able to have choice as regards getting the cheapest or the best service they can. That is something we would strongly support. We do not believe that this legislation is needed to address that point.
The Senator is absolutely right with regard to monopolies and cartels. That is something we are very concerned about and it is something we work on throughout the economy. It has not been a particular issue in the veterinary sector thus far, but it is something we would take action on if we thought that there was a monopoly that was going to harm consumers in terms of providing a service or a higher price, ultimately leading to what we call a substantial lessening of competition. We would take action where we saw that happening. One area where this might be relevant is that we would like the power to be able to call in mergers. Currently, any mergers above the threshold must be sent to the CCPC for approval before a merger acquisition can be enacted. We would also like to have the ability to call in problematic mergers below that threshold. Where people have evidence that there may be monopolies or there may be problematic arrangements in place and there may be a lack of competition or a lessening of competition in any area in any market, we are always interested in hearing about it. When we do and where we have the evidence, we will take action.
Another issue I wish to discuss is the actions taken by the CCPC, our views of consumers and our views of corporate. With regard to competition, to pick one area of our remit, we have recently completed cases against private motor insurance companies, against Ticketmaster and against a UK furniture wholesaler. These are not small companies. Some of them are massive multinationals. Where we saw that there was an issue, we gathered the evidence and where the evidence justified it, we set out our case and secured changes in those markets. We will continue to follow the evidence. Regardless of how big a company is, where there is evidence of a breach of competition law we will take action. The record shows we do that, and we will continue to do it.
To tease it out a little further, I get the strong impression from Mr. McHugh's response that he sees the CCPC's role as being reactive. There has to be an issue and then the CCPC will analyse it, forensically examine it and decide what action could be taken to reverse it. We are legislators and we are trying to be proactive. Can Mr. McHugh see where the difference in our opinions is, based on the proactive rather than the reactive? Everything he has said shows that the CCPC is a reactive organisation. Something has to have happened and there has to be a problem before the CCPC will set out to address it and take action. Where there might be a difference in our opinions is that we are trying to be proactive. Would Mr. McHugh agree with that analogy?
Mr. Brian McHugh:
It is true that there are times when we are reactive. I would not describe it as such as regards mergers. We will prevent mergers happening where there is a substantial lessening of competition. Perhaps the biggest difference is what is necessary and proportionate to deal with the potential problems in the veterinary sector. We are not saying there are no problems. What we are saying is that there is a regulator in place and that the evidence needs to be collected on what the problem is and what might be the options for solutions, including forward-looking ones. In terms of identifying those issues and addressing them, that is what regulators are for, to a large extent, in many markets. They are very successful at identifying problems and preventing them. Our view is that these issues, which may be very real, would have to be examined, the evidence would have to be collected by a regulator and then decisions would be made on what are the best steps to address them, including regulatory actions, as opposed to legislative solutions that have a huge impact on the sector and a potentially huge impact on individuals, customers and employees of the organisations which may be impacted by this legislation. That may be an area of difference today.
Mr. Brian McHugh:
Yes. One of the recommendations in our presentation is that what should be examined is the ability of the Veterinary Council of Ireland to have an impact on the corporates that run veterinary practices as well as the individual vets. We referenced the Pharmacy Act and how that works so our proposal is-----
Mr. Brian McHugh:
Our proposal is that there is a structure in place there, and there is precedent in place in terms of other sectors. That is a step that would be reasonable to take in finding solutions to potential problems. I believe that the natural step of a regulator expanding its remit to deal with issues, compared with this legislation which would be unique in Europe and which raises legal issues, is much more proportionate and reasonable to try to solve the problems that may well exist.
I come from a medium-sized town. It has about seven pharmacies, all very good businesses. I also represent a number of villages and smaller towns that have no pharmacies. What would the CCPC do if I were to report a village that did not have a pharmacy to it?
Mr. Brian McHugh:
There is no legal requirement on every village to have a pharmacy. On the issue of pharmacies, we previously had a situation in Ireland whereby a pharmacy was not allowed to open if it was too close to another pharmacy. That is the type of very strong regulation and restriction that does not benefit consumers.
Herein lies the problem, because Mr. McHugh mentioned pharmacies a number of times with regard to the approach we should take to veterinary practices. If an area that is currently serviced by a veterinary practice is not serviced by such a practice in the future, it means that farms will be essentially inoperable. They will not be able to operate as they do currently. Mr. McHugh has highlighted and recommended an approach that simply will not work in the sector we are describing now.
Mr. McHugh has outlined and championed a scenario that sees pharmacies moving to the areas of greatest profitability, as opposed to providing the best service to consumers. That pinpoints the difficulty I have with the commission's approach.
Mr. Brian McHugh:
What I would say to that is currently, a veterinary practice is in business. It has farmers and other consumers who use it. That will continue. If the veterinary practice is providing those consumers with the services they want, they are absolutely free to continue using that veterinary practice. We are not here saying one corporate structure is better than another. We are here saying consumers should have choice. Where consumers use a business and where it provides that service, they will continue to do so.
Okay. Take a scenario in which an area is currently being serviced by a couple of vets and a new entity driven by profit moves into the area. The vets who are operating are working for a non-vet whose objective is profit-making and they undercut the existing vets in the areas that are most profitable, usually small animal care, and increase charges for large animal care to the extent the existing vets cannot continue. What would the CCPC do in that instance?
Mr. Brian McHugh:
I am assuming that currently veterinary practices make a profit. They provide a service consumers want in those areas and whichever corporate entity comes in I do not see why a partnership with multiple vets, or a corporate entity with non-vets, or a sole trader is going to choose one particular path to go down. The idea one particular type of corporate entity is going to have a really radical impact in certain areas is one I find hard to follow. What we are saying, and what I keep coming back to, is those consumers should have the choice of where they want to go. Where those consumers and farmers in those areas have used that veterinary practice, get they the service they want and that veterinary practice makes a profit, as I take it they currently do, then that will continue.
Mr. McHugh has missed my point entirely. Maybe it was my articulation of it. We have looked at the California Department of Consumer Affairs, which has adjudicated on this scenario, which has become widespread there. We have seen what happened in Britain, which apparently has not formed any part of the commission's deliberation. There is a need to analyse how vets currently operate and the prospect of a system dominated by non-vet corporate entities. I believe if the commission were to approach that with the concerns of the consumers at the centre of its deliberations, the officials would have a very different position today.
Mr. Brian McHugh:
My screen has gone a little bit funny but if I can, I will say that I completely agree further analysis would be really useful to understand what the problems are, what the evidence is in terms what the impact might be and then to take action based on that. In many markets, that is the role of a regulator. Regulators can do an excellent job. We think the VCI would have a role to play here in looking at those issues and proposing solutions.
First, it is the job of the competition authority to protect the consumer. Between 2005 and 2017, that was working perfectly well. When the interpretation of legislation was changed in 2017, the competition authority did not raise any issues. However, I think the witnesses have conceded that the VCI, which is the regulatory body, has no control over lay operators and that is a fundamental point. I have a question for Mr. McHugh. The regulatory body has no control over the ownership of practices. Suppose the owner of a practice is buying veterinary medicines and supplying veterinary medicines that are prescribed drugs and which, I read this earlier, clearly is in contravention of the animal remedies regulations. Does he consider what is happening and what the VCI has allowed to happen to be legal?
I thank members. I do not think there are any more contributions to be made. On behalf of the committee I thank the officials from the CCPC for giving their views on the Veterinary Practice (Amendment) Bill 2021. We will suspend to allow the next session to be set up.
We are joined by representatives of the Veterinary Council of Ireland. I welcome Ms Niamh Muldoon, Mr. Joe Moffitt and Dr. Ailís Ní Ríain. I will presently invite them to make their opening statement, which will be followed by questions and answers.
Before doing so, I must read the following important notice regarding parliamentary privilege. Witnesses are protected by absolute privilege in respect of the evidence they give to the committee. However, if they are directed by the committee to cease giving evidence in respect of a particular matter and they continue to do so, they will be entitled only to a qualified privilege in respect of their evidence. They are directed that only evidence connected to the subject matter of these proceedings may be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against a person or entity by name or in such a way as to make him, her or it identifiable.
It is great that witnesses can make opening statements again in our committee rooms. Ms Muldoon is more than welcome to this meeting of the committee. I invite her to make her opening statement.
Ms Niamh Muldoon:
Good evening Vice Chairman, Deputies and Senators. I am registrar and CEO of the Veterinary Council of Ireland. I am joined today by Mr. Joe Moffitt, president, and Dr. Ailís Ní Riain, deputy president of the veterinary council. On behalf of the council, we welcome the opportunity to discuss the Veterinary Practice (Amendment) Bill 2021 with the Oireachtas joint committee and thank the members for the invitation to appear before them today.
The veterinary council is the statutory body responsible for the regulation and management of the veterinary professions, being veterinary practitioners and veterinary nurses in Ireland. The Veterinary Council of Ireland is a statutory body set up under the Veterinary Practice Act 2005, as amended, and is under the aegis of the Minister for Agriculture, Food, and the Marine. The principal function of the council is to regulate the practice of veterinary medicine and veterinary nursing in the Republic of Ireland in the interests of animal health and welfare and veterinary public health. The functions of the veterinary council include protection of the public through the supervision of veterinary education, the maintenance of the register of veterinary practitioners and veterinary nurses, the registration of veterinary premises, and through disciplinary action in cases of professional misconduct.
One point we wish to make clear at the outset is that the veterinary council does not express a view one way or the other on the desirability or otherwise of a restriction on ownership of the sort proposed. Rather we fully acknowledge this is a policy issue for the Houses of the Oireachtas. What we hope to do is to identify some of the practical and other issues that may arise in an effort to assist the committee in its considerations. The council acknowledges it is a wholly a matter for the Houses of the Oireachtas to adopt legislation that facilitates the regulation of the practice of veterinary medicine and veterinary nursing in a manner that is in the best interests of the public and maintains high standards in the practice of veterinary medicine. In addition, the council respects the role reserved exclusively for the Houses of the Oireachtas to determine matters of policy regarding public interest and animal health and welfare. Our principal function is to regulate and manage the practice of veterinary medicine and veterinary nursing in the State in the public interest in accordance with the legislation.
The proposed amendments contained in the Veterinary Practice (Amendment) Bill 2021 include some significant changes to the ownership of veterinary practices. The matter of ownership of veterinary practices has not been addressed in Irish legislation heretofore. The Veterinary Surgeons Act 1931 and the Veterinary Practice Act 2005 do not speak to ownership of veterinary practices. The Veterinary Surgeons Act 1931 included a prohibition on corporate bodies practising veterinary medicine. While we can only speculate on the intent of any such legislation it may be that such provision was to ensure that any person suffering losses arising from the actions of a registered person in the practice of veterinary medicine were afforded the opportunity for redress against any individual, preventing the evasion of civil liability by any individual. The legal requirement for veterinary practitioners to hold a policy of professional indemnity insurance was introduced in 2012 under the Veterinary Practice (Amendment) Act 2012, thereby addressing matters relating to civil liability in the public interest. In contemplation of the Veterinary Practice Act 2005, there may have also been some intention regarding the taxable income structures in operation. Historically, section 54(2) of the Veterinary Practitioners Act 2005 was interpreted to prevent a body corporate from owning a veterinary practice. However, legal advice received by the council advised that the legislation does not speak to the ownership of practices and, thus, the council has no legal authority in determining the ownership of practices under current legislation. The council has in the past been incorrectly painted as the villain in matters regarding ownership of veterinary practices. No legislation to date has addressed the issue of veterinary practice ownership. The council can act only on the powers conferred in law in the interest of animal health and welfare, public interest and public health. The council has no legal powers over the regulation of the market regarding corporate ownership of veterinary practices. The parameters of our powers, as established under the Veterinary Practitioners Act 2005, do not extend to ownership. No legislation previously enacted by the Oireachtas has dealt with the matter of ownership of veterinary practices. Irrespective of approach to ownership of veterinary practices, the council must and will continue to ensure the highest standards of veterinary medicine in the regulation and management of the professions.
The question of corporate ownership and other forms of legal ownership, and the linked issue of lay ownership, have been topics of some debate within the profession in recent years. In this regard, the council engaged Grant Thornton to carry out a significant consultation process in 2019, following which it published in July 2019 a report entitled Analysis of the VCI Consultation on Corporate Ownership of Veterinary Practices, which will be referred to as the Grant Thornton report, a copy of which has been provided to the committee. We commend this report to the committee and urge that it be considered in detail as it contains much useful background and contextual material. Importantly, it makes clear that a significant number of veterinary practices are, in fact, incorporated, that is, they are companies. It is against this backdrop we appear to inform and assist the committee in its consideration of legislation. The sole objective of the council is to continue to be a trusted and effective regulator and to assist the committee in any policy considerations to ensure practicable, durable and enforceable legislation in the public interest.
We reiterate the point that the council does not express a view one way or the other on the desirability or otherwise of a restriction on ownership of the sort proposed. Rather we fully acknowledge that this is a policy issue for the Houses of the Oireachtas. Our hope is to identify some of the practical and other issues that may arise in an effort to assist and inform the committee. We as a veterinary council currently hold no information on the ownership of veterinary practices as we have no legal basis to make any such request for information. We currently issue what are referred to as certificates of suitability, as deemed appropriate, to applications from registered persons for specified veterinary practice premises, which meet regulations and standards as laid down by the council. We collect data and information on any registered persons associated with any veterinary practice, the nature of the veterinary services offered, confirmation of professional indemnity policies held and other such relevant information. We do not have any information on the owner of a single veterinary practice currently in the country.
It appears that there may well be a significant issue regarding pre-existing corporate structures where there are already owners, that is, shareholders, who are not registered veterinary practitioners. It would appear from the proposed amendment that they would be committing a criminal offence by reason of the simple expedient of their ownership. It is not clear if this is the intent of the amendments proposed. Also, it occurs that there may well be legal or constitutional issues here around property ownership and expropriation that might need to be considered. In the event that there is a real prospect of a requirement to compensate shareholders in the case of expropriation, the council understands the matter of any potential redress for such impacted parties arising as a result of legislative change will be a matter for the Houses of the Oireachtas. In this regard, the council understands the proposed legislation will benefit from detailed legal scrutiny in due course. It is suggested that if restrictions on persons other than registered veterinary practitioners are to be brought into effect then it will be necessary to ensure there are appropriate enforcement and investigative powers to ensure that any law can be enforced. The council is anxious to ensure that any proposed legislation to be enforced by it is suitably robust and capable of enforcement by it in the public interest and in the interest of animal health and welfare.
The council again highlights its wish to assist the committee in the consideration of these matters in a constructive way. The objective of both our recent written submission and our appearance today is to highlight aspects of the draft legislation that may require further consideration or refinement to ensure that any legislation endorsed by the committee is informed, practical and enforceable. We respect that matters of policy are reserved for the Houses of the Oireachtas and, accordingly, the council can adopt no position on draft legislation which may fall to it to enforce, if enacted. As will be apparent from the Grant Thornton report, there is a broad church of opinion within the professions and among the public on the question of corporate ownership and related issues such as lay ownership of veterinary practices. Many of the views of stakeholders are held deeply and passionately. The council suggests that there is much important information and useful context in the Grant Thornton report that should shed light on the divergent views and some of the issues that arise.
The report also deals with regulatory structures based on regulation of the individual or regulation of the practice in veterinary regulation in other jurisdictions, in addition to detailing the structures of regulation relied upon for other health professionals, such as doctors, dentists and pharmacists.
Irrespective of the approach to ownership of veterinary practices, the council must continue to ensure the highest standards of veterinary medicine in the regulation and management of the professions. We will continue to work to ensure that the high standards expected and enjoyed in the veterinary industry are upheld, and that the quality of veterinary care is continuously improving into the future, in the best interests of animal health and welfare and the public interest.
I thank the Chairman, Vice Chairman and the committee for the invitation to address them today. The president of the Veterinary Council, the deputy president and I are happy to address any questions the committee may have.
I thank the witnesses for coming today to help us with pre-legislative scrutiny of the Veterinary Practice (Amendment) Bill 2021, which I am sponsoring. The fact I brought forward this amendment came out of a couple of meetings of the joint committee in the last Dáil, when we had the Veterinary Council with us on more than one occasion. It was the unanimous view of the Oireachtas committee that we were unhappy with the explanations we got as to why the interpretation of the 2005 legislation was changed in 2017 and 2018. From 2005 to 2017, it was regulated such that only veterinary practitioners could own veterinary practices but that interpretation of the legislation then changed and allowed lay people to purchase practices. After a number of these practices were purchased, it was then decided to hold a consultation process to get the views of different stakeholders and individuals, as Ms Muldoon noted. After that consultation process, the Veterinary Council continued to interpret the legislation in a different way from it did previously. That is what has brought us here today with this amendment to the Veterinary Practice Bill.
I fully accept the Veterinary Council is not a policy maker and that it is there to regulate. There are a number of points I want to make. Senators Paul Daly and Tim Lombard were on the previous committee, as was the former Deputy Willie Penrose, who had a very legalistic mind and was extremely unhappy with the way things had progressed. We are all here around this table to make sure what we do is in the best interests of human health and that human health is protected, which is the first fundamental, and then to protect the consumer and to protect animal health and welfare.
We have seen in other jurisdictions that where corporates have gained a stranglehold on the ownership of veterinary practices, the service to the consumer has deteriorated and the cost of that service has increased. Leaving that aside, the unambiguous reality is that the Veterinary Council has no regulatory control over the operators and lay operators are now the beneficial owners of a number of veterinary practices in this country. That is a very fundamental point and is what has caused us to bring forward this legislation.
While I accept the animal remedies regulation is outside the Veterinary Council's sphere of regulation, it is central to this as well. As a committee, we have been discussing animal medicines, in particular the availability of non-prescriptive animal medicines, and the worry about resistance among animals and, more importantly, the danger of resistance to drugs for human use, as well as the over-usage of those drugs. The Department’s view is that it wants to regulate the availability of those remedies very significantly.
We now have a situation where lay people are able to purchase drugs and keep them in their control, and the Veterinary Council has no regulatory control over those people. This happened in Northern Ireland, where a vet was locked out of the practice where he worked and kept away from the drugs that were in the practice. We have physical evidence of where this has happened. While I accept the animal remedies regulation is in the remit of the Department of Agriculture, Food and the Marine, the Veterinary Council’s regulatory powers over drugs and the usage of drugs, in my view, are seriously diminished when veterinarians are not in ownership of the practice.
Ms Muldoon said in her statement that ownership was never in the legislation but the previous position was that a veterinary practice in a commercial premises must be wholly owned by veterinary practitioners. The Veterinary Practice Act operates in conjunction with the code of professional conduct governing the veterinary profession, and that is the statement that was made, namely, the commercial premises have to be completely owned by veterinary practitioners.
I do not want to get into a civil war with the witnesses and I would not see that as in any way constructive in the scrutiny of this legislation. I have been focused on this since the Oireachtas meetings we had and, before that, when representations were made to us by stakeholders about their unhappiness at what was happening in the interpretation of the legislation by the Veterinary Council. My view is that the Veterinary Council, in changing the interpretation of the legislation, operated outside its remit. If legislation was to be changed from how it had been operating for the previous 13 or 14 years, it should have been done with amending legislation and that should have been done by the Oireachtas. If the Veterinary Council was unhappy with the legislation, it should have proposed to the Department and to the Government that it wanted that legislation amended. Changing the interpretation of it was, in my view, outside its remit.
As I said, we have this legislation and we are doing pre-legislative scrutiny of it today. With the last witnesses, I read out different European Court of Justice decisions which clearly state that, as a state, we have the remit and the authority to make changes and to make any profession restrictive, if we want. It has been done in Germany, where legislation has been brought in for pharmacies, which is not far removed from what we are talking about, to ensure there is a ban on outside ownership and that there is job-related independence of the pharmacist.
That is done in Germany so we are very much in line with EU law in bringing forward this amendment Bill. As I said, the principal reason for bringing the Bill forward is to ensure the VCI will have the authority to regulate the operators in the industry. As it stands, the VCI has not got authority over the owners. I think that is clear. They are lay operators and the council does not have authority over them. The protection of the consumer, animal health and welfare and public health must be paramount. This Bill will reinforce the powers of the VCI to regulate the industry in the interest of all the aspects I mentioned.
The VCI representatives have made it clear they cannot come in here and dictate to us on what is a policy issue and I respect that. They have come in to give their views on what the impact of the Bill will be and that is fine. I would say clearly that protecting public health by limiting the sale and supply of critically important prescription drugs to veterinary practitioners and pharmacists and ensuring the independence of veterinary practitioners and their practice of veterinary medicine are, in my view as a legislator, two very important things to do. This amendment to the legislation will in my view ensure the VCI has the regulatory power to do that. As it stands at the moment I am convinced the council has no regulatory authority over lay operators.
There are an awful lot of other issues regarding career paths for young vets. They will see that corporates taking over practices will curtail their career progression and these are obviously all important issues as well, but human health and the control of medicines is paramount. These are my principle reasons for bringing forward the Bill but as I said there are other reasons. We in this country have been very fortunate to have an excellent veterinary service over generations at a reasonable cost. While we have issues in some isolated rural areas with the availability of vets for large animal practices, I am very clear in my mind that lay ownership of veterinary practices will actually hinder the entry of young veterinarians into the sector.
Lay corporates will target the more lucrative practices. With some practices that mix small animals and large, the small animal work keeps the practice viable and if that is taken away by a competitor that has no interest in large animals it is going to make it harder to provide services in rural areas. Vets will tell one it is the small animal work that subsidises the other side of the business. I think we all agree ensuring public health is protected is paramount. That is my reason for bringing forward this Bill.
Some people will say we have corporates in now and ask what we are going to do with them. Again, there are cases in France where practices have been delisted. Corporates were set up and the French authorities delisted them so in my view that is something that can be addressed and overcome.
What we as a committee must decide is whether this Veterinary Practice (Amendment) Bill, which would confine ownership of veterinary practices to veterinarians, is in the best interests of public health and animal health and welfare, whether it protects the consumer and whether it is the best possible way to ensure a 24-hour service is provided at a reasonable cost to the consumers vets deliver that service to. I am very much of the view this is the way forward for us. As I said, we have seen other countries which have corporates taking over practices in rural areas and the level of service has declined to such an extent that animal welfare has become as serious issue. I do not want to see us descending to that. I am first and foremost a farmer and I always had a very good relationship with my veterinary practice. The services practices provide, virtually at the drop of a hat, must be admired. That we have such a service provided to us is the envy of other sectors.
This amendment Bill will ensure that service is protected and that the VCI has the regulatory power to ensure public health and animal health and welfare are protected to the utmost. As I said, I fully accept the council representatives cannot pass a view on the Bill and that it is our job as legislators to do that. I accept the representatives can come in and point to where they see issues with the impact of this Bill. We have been discussing the best way to proceed on this for three or four years now . I am convinced this amendment will deliver what we want for our citizens and also for the veterinary profession.
Ms Niamh Muldoon:
The Deputy referenced the excellent veterinary service provided around the country. In that regard, I must outline the role of the council in regulating the practice of veterinary medicine and veterinary nursing by the individuals who deliver that service all around the country. The VCI's role is in terms of safeguarding our register to ensure any person on it is fit, suitable and suitably qualified and educated. We accredit and approve the programmes of education such as veterinary medicine in UCD and the veterinary nursing courses around the country. Members may have some experience of these from relatives graduating from them. All these inputs work to support the standards, from continuing veterinary education throughout the career of any vet and veterinary nurse, to the code of conduct which is binding on any vet or veterinary nurse in the country. All these tools available to us as a regulator help to support the strong standards we enjoy in the country.
Regardless of any model of regulation, be it on the individual, a veterinary practice or on ownership, no regulator will be able to control the deliver of services per se.They are market matters. Regardless of the preferred model of regulation, that cannot be controlled. The current model is similar to that enjoyed by the medical, dental and pharmaceutical professions. Regardless of the model or regulation, which these Houses will ultimately determine, the role for the VCI as regulator is to ensure we can effectively regulate those standards, as we have been doing for many years, and that his country and all the consumers and farmers around the country, and ultimately society, benefit from those high standards enjoyed in the regulation of vets and vet nurses by the council, through all the means available to us.
When I talk about regulation and human health, I am talking principally about the regulation of the supply and sale of drugs. It is clear to me lay owners are outside the VCI's remit and that it has no power to regulate them. I can give an instance where a lay operator owned a practice and the vet he had working there left and that practice continued to sell drugs even after that vet had left the practice. For a two-month period there was no vet working in that practice.
This clearly shows that the Veterinary Council is not able to regulate lay owners of veterinary practices in the way it would want to. That is the point I was making. I do not expect the council to be able to ensure that there is a service in every part of the country. That is not the council's job and people will decide, mostly for financial reasons, whether an area is viable. Thankfully, it is not yet the case that there are areas without a veterinary practitioner.
Ms Niamh Muldoon:
The Deputy referenced the appeal of the veterinary profession. We have a fair amount of information about the number of vets. The shine of the profession has not been impacted and it is as popular as ever. We have one programme of veterinary medicine in the country. Currently, there are 3,175 vets on our register, 28% of whom qualified abroad. There is a significant appeal to the profession and high levels of demand across it, so much so that we see many entrants to our register who have qualified abroad. I will cite a statistic that might be of relevance or interest to the committee: some 55% of people who joined the register in 2020 qualified abroad. We are seeing significant numbers joining our register from programmes of veterinary medicine outside of Ireland. That speaks to the continuing high level of interest in and demand for entry into the profession.
I thank the witnesses for attending and for their engagement on this issue. I will start where Ms Muldoon finished and ask her to explain matters to me as someone who does not fully understand how this works. She stated that the council ensured "the highest standards of veterinary medicine in the regulation and management of the professions." Is it the case that, as Deputy Cahill said, it is the council's job to regulate the individual registered vet as opposed to the entity for which he or she works?
Ms Niamh Muldoon:
Yes. We do not know who has ownership. I cannot tell the Deputy who owns any practice in the country. There are approximately 770 veterinary practice premises, all of which operate following the issuing of a certificate of suitability by the Veterinary Council to an individual registered with us.
As to how we regulate, individuals join the register after being proofed or assessed by the Veterinary Council as being suitably educated and qualified, as being of sufficiently good standing if they have worked abroad, for example, if they have encountered disciplinary matters, and as continuing their veterinary education, given that, regardless of whether vets have been qualified for five, ten, 20 or 40 years, they must maintain their competence and skill to ensure they can deliver a strong service. We also have a code of professional conduct.
I know all of that, but I am trying to get to the actual regulation. I am sure such cases are few and far between, but what about instances of alleged misconduct or breaches of the regulations or legislation? The council would investigate the individual vet in such an instance.
As with any business, there is the potential for a systems failure, particularly when dealing with antibiotics. The entity would be at fault as opposed to the vet. I am seeking clarification of Deputy Cahill's point. When the beneficial owner of the entity is not a vet, what can the Veterinary Council do?
I am not asking about ownership, but about responsibility. If the responsibility is a corporate one, to use that term, because there has been a systems failure within the business, the owner would be ultimately responsibility in most other sectors. If four or five vets were operating in an entity but the beneficial owner who was responsible was not a vet, what recourse would the council have?
The previous interpretation of the Act was the cause of considerable debate at the previous committee and the reason for this legislation's introduction by Deputy Cahill. I was not party to those debates, so I apologise if some of my questions were answered then. Ms Muldoon referred to the historical interpretation that prevented a body corporate from becoming a veterinary practice and how legal advice received by the Veterinary Council essentially advised that it had been misinterpreting the provision. When was that legal advice sought and received?
Ms Niamh Muldoon:
I understand that there were a number of inquiries and a greater degree of focus on the wording used in the code. Quite appropriately, the Veterinary Council took legal advice around its powers under the Veterinary Practice Act. That advice clarified that the Act did not speak to ownership. Accordingly, the Veterinary Council clarified the matter of ownership.
Prior to 2018, I take it that the Veterinary Council was satisfied that the veterinary services provided across Ireland were operating in an effective and efficient manner and were doing what the council needed them to do.
Ms Muldoon has mentioned a number of times that the council does not have information on the ownership of practices. She also mentioned that one of the council's roles was to receive confirmation of professional indemnity. To whom does the professional indemnity relate? Does it only relate to individual vets?
Ms Niamh Muldoon:
Yes. Every individual on our register has to be covered by a policy of professional indemnity in order to cover the consumer and the service user. When an individual comes to renew his or her registration with us, the individual is required to confirm that he or she either has professional indemnity insurance in place or that-----
Ms Niamh Muldoon:
Any individual renewing registration will make a declaration that all of the information he or she is providing is correct. In the same way, we do not require individuals on the system to provide proof of their address. These are members of a profession. They give us information across a range of areas and we rely on that.
Ms Muldoon mentioned that the Grant Thornton report concluded that there is a broad range of opinion within the profession and among the public on the question of corporate ownership. From my reading of the report, I understand that it indicated that 44% of the public were against corporate ownership while 13% were in favour. That does not show broad support.
Among vets, 71% were opposed to corporate ownership, as were 85% of veterinary nurses. These people are currently working in practices and they were opposed to corporate ownership. For the purposes of this debate, corporate ownership means the beneficial owner of a veterinary practice not being a vet.
Ms Niamh Muldoon:
Perhaps we are at cross purposes in terms of figures but, if Deputy Carthy looks at page 14 of that report, he will see that a Behaviour & Attitudes survey of veterinary practitioners and veterinary nurses showed that 52% of vets and 42% of nurses were not in favour of corporatisation. Some 34% of vets were in favour of allowing corporatisation and 14% of those surveyed believed it made no difference. Among nurses, 34% were in favour while 25% said it made no difference. In the second paragraph on page 14, it says "Corporate ownership opposition shifted from 50% to 52% among veterinary practitioners and from 41% to 42% among veterinary nurses."
One of the things its representatives stated was that "those practices are operating outside the Veterinary Practice Act and in complete contravention of the animal remedies regulations". Veterinary Ireland also indicated that legal advice was provided to a corporate owner that entered the market indicating the same. Does Ms Muldoon have a response to that?
Ms Niamh Muldoon:
I do not have the benefit of having seen the advice Veterinary Ireland referred to. What I can say - and this probably speaks to some of the points Deputy Cahill made earlier - is that the animal remedies regulations oversee the control of medicine. That matter rests with the Department of Agriculture, Food and the Marine. It is not a matter the Veterinary Council of Ireland has any control over.
I welcome the witnesses from the VCI. If they will bear with me for a moment, I will quote from its code of professional conduct, prior to its amendment. It is very specific in saying "Any veterinary practice established in commercial premises must be wholly owned by a veterinary practitioner or group of veterinary practitioners who must be fully responsible for the conduct and practice and for the ethical and legal obligations falling upon its veterinary practitioners." It also states "The attention of veterinary practitioners is directed to section 54(2) of the Veterinary Practice Act 2005 which prohibits the practice of veterinary surgery or medicine by corporate bodies." That was then. Perhaps we can have some discussion on this. I want to question the witnesses initially about the position then before moving on to the present. That was the VCI's code of practice and its interpretation of the Act. How did it police that at the time? What would it have done if a corporate had appeared at that time or if the VCI had seen corporate ownership? The VCI has said here today that it has no control over ownership but in that code of practice, it specifically said that it was responsible for ownership. It was telling the veterinary, agricultural and corporate worlds who could own a practice and who could not. If a matter is included in the VCI's code of professional practice, it has responsibility for it. It has to do what it says on the tin. How did the VCI police that issue then? What interactions did it have with veterinary practice owners? At that time, when the VCI admitted this was part of its role, how did it know who owned veterinary practices? The witnesses know the point I am trying to make. I will move onto the situation post the amendments in a second.
Ms Niamh Muldoon:
I do hear the Senator's point and the truth is that the Veterinary Council of Ireland has no legal power to regulate ownership. I fully accept that was in the code of conduct prior to 2018 but, to the question of whether the council could have taken any action against any individual practice whether veterinary-owned or otherwise at that time, the answer is "No" because the legislation does not give us the power to do so.
The council had a code of professional practice which was basically not worth the paper it was written on because it did not have the power to enforce it. However, the council did interpret the Act to mean that it was its role to enforce it by virtue of the fact that it was included in its code of professional practice.
The council then moved on and, for whatever reason, decided to change its interpretation. As far as I can see, it effectively deregulated the ownership of veterinary practice. Deputy Cahill is now trying to regulate it again. The council moved off the field. It actually usurped the function of the Oireachtas. It deregulated ownership because, based on its own code of practice, it was the regulator. It moved off the field and changed its code of professional conduct based on outside legal opinion, an interpretation of an Act of the Oireachtas, a law of the land. Did the council consult with the Oireachtas, the Oireachtas legal team, the Attorney General or the Department? Where are their opinions?
Ms Niamh Muldoon:
The answer is "No". The Veterinary Council of Ireland can only enforce the legislation we have. I fully accept that at the time, an interpretation of the legislation was reflected in the code of conduct, whether correctly or incorrectly. That was then clarified in legal advices given to the council to the effect that the legislation does not speak to ownership. The council is a statutory body and can only use the powers given to us by Leinster House. Once legal advice that the Veterinary Council of Ireland did not have powers in respect of ownership was received, the correct process for the council was to reflect that position, which is what it did. This did cause consternation. In hindsight, the Grant Thornton report and the associated consultation and engagement with the stakeholders was very helpful. That has now been put in place. That report will be very helpful not only to the Veterinary Council of Ireland, but also to this committee. The issue is very divisive. We know that. Our role is to regulate effectively. That is what we have been doing and what we will continue to do with any legislation that is in place.
Ms Niamh Muldoon:
I cannot answer that because we hold no information on the ownership of any practice. We can say how many vets and nurses there are on our register and how many certificates of suitability we issue to veterinary practices around the country, but I cannot say who owns a single one of those 769 practices.
Perception is dangerous but because of the VCI's code of professional practice it was perceived that it was the regulator of ownership. Does Ms Muldoon see where I am coming from when I say that the VCI deregulated ownership by changing its code of professional practice? There is nobody there to regulate it now and the VCI previously had it in its code of practice. Rightly or wrongly it was perceived that anyone who would go to find out who regulates ownership would reach the VCI's code of professional practice and conclude that it was the regulator. People would assume that the VCI's code of practice was so definitive on ownership that it must be the regulator. Ms Muldoon is saying that while that was in the VCI's code of practice it had no interest in ownership and it was not regulating it. At least the VCI was saving the industry from corporates because people would see that and assume the VCI was the regulator. Therefore the VCI deregulated ownership.
Ms Niamh Muldoon:
As I see it the 1931 Act carried an inference on ownership and that was relied upon, correctly or incorrectly, which carried through to the 2005 Act. The VCI interpreted that in a particular way. When one looks at all the legislation at no stage does it speaks to ownership. It is arguably no different to other legislation for professional regulation but none of the Acts speak to ownership and so the VCI can only reflect the powers it has which are given to it by Members of the Oireachtas.
Does Ms Muldoon appreciate the need for the regulation of ownership, irrespective of what that regulation says? Is there a need for the regulation of owners, aside from the professional practitioners the VCI regulates?
Ms Niamh Muldoon:
It would be inappropriate for me to give an opinion on that because as the regulators we have to regulate with whatever legislation is in place. We have to regulate with all the powers and regulatory tools that are provided to us. We are an effective regulator and we will continue in that, armed with the regulatory tools to allow us to do what we need to do in the public interest to make sure standards in the practice of veterinary medicine and nursing remain strong. I cannot comment on whether the regulation of ownership is advisable or not because whatever legislation is in place has to be enforced by the VCI. It would be inappropriate for the VCI to make a comment on policy because those matters are squarely reserved for these fine Houses.
I want to make a couple of points on the legal advice that ultimately found its way into the Grant Thornton report. There were four people involved, which included a solicitor, a junior counsel and a senior counsel. Who was the fourth one?
We would have started with the solicitor. The solicitor would have got the junior counsel and the junior counsel would have got the senior counsel. At all times the one team was probably going to provide the advice. Was it ever thought to step outside and look for alternative legal advice?
That is fine. Coming back to professional indemnity, which each vet and nurse in a practice would have, my colleague, Deputy Cahill, made a good point about a practice operating that did not have a vet at a particular point. Hypothetically, if I went into a practice and got medication for my in-foal mare and she tragically died, what would my recourse be?
Ms Niamh Muldoon:
We are speaking in the round but for any practice to be put in place it must have a certificate of suitability and that certificate can only be held by an individual on our registers. Even if an individual practitioner chooses to change the practice in which he or she is practising, there will always be an individual responsible through the certificate of suitability. I am conscious that we are speaking in the round so I am not sure if that is helpful to the Deputy.
If there was a two-month period when there was no vet in a practice it comes back to the issue of ownership and the policing of same. More specifically, going back to the Veterinary Practice Act 2005, which according to the report of the Competition and Consumer Protection Commission would appear to prohibit vets from incorporating. I am conscious that Ms Muldoon said that the VCI does not have the details on the incorporation of any practices. Was there ever a feeling on behalf of the VCI, based on what was in the 2005 Act, that it should have those details, given that a lot of practices have probably built up valuable property over time? In most instances practices probably have a property company and a trading entity, which would be the practice itself. Surely some of those practices would have been operating outside of the remit of the 2005 Act, even before we come to lay operators coming in?
Ms Niamh Muldoon:
All I can say is that we do not hold information on whether any practice is being run through a limited company or not. Neither do we hold any information on the ownership of any practice. The elements the Deputy sets out are not visible to us because we do not hold that information. I cannot say that would not have been an issue in 2010, 2015 or 2020 because at no point did we ever gather that information or would we have had the power to do so.
Ms Muldoon will probably feel we are going back over the same issue but I would make the point that the VCI probably should have been doing that. If there was a specific section in the 2005 Act that said that practices should not be incorporating then the VCI probably should have been doing that at the time. I accept that it was not being done. I will ask Ms Muldoon an easy question to finish up with. There are 3,175 vets and 28% of them would have qualified abroad. Some 55% of new entrants studied abroad. There is a case to be made that we should probably have an additional route into veterinary in Ireland.
Ms Niamh Muldoon:
The demand is high and we see that in the Central Applications Office points every year. Without question there is strong demand for people to get into the profession. We know there is a popular and well-regarded programme of veterinary medicine in Ireland but ultimately there is only programme of veterinary medicine here so it might be a matter for the committee or the Department to consider further.
I want to try to get a grasp of where the VCI is coming from because Ms Muldoon said a number of times that this legislation is not something she would comment on. Ms Muldoon will not comment on whether there is an issue pertaining to the regulation of owners or not. I want to go back to the point on the regulation of individual vets. Does it operate on the same basis as the system that the Irish Medical Council has? Does the VCI have the power to strike off a vet for misconduct?
Ms Niamh Muldoon:
Yes. The VCI is strong in enforcing the standards through the code. In 2020, for example, one vet was erased from the register and four vets were suspended. Removal from practice is a fairly significant sanction as it involves the loss of livelihood for a time, all of which is supervised by the High Court once censure is imposed.
Ms Niamh Muldoon:
Yes, they have to be on our register. They would not carry the same requirements in terms of indemnity because they may not be providing services to the public, for example, they may be operating from exempted premises or be exempted from the requirement for professional indemnity. However, they must register with us every year. Even if somebody is not in private practice, the same requirements apply in terms of continuing veterinary education, being bound by the code and having to register with us every year.