James Reilly (Dublin North, Fine Gael) | Oireachtas source

The indemnity caps for medical consultants in private practice were introduced, with Government approval, in February 2004, following the migration into the State's clinical indemnity scheme, CIS, of hospital consultants engaged in public practice. With the establishment of the CIS, the medical defence organisations, such as the Medical Protection Society and the Medical Defence Union, had a significantly diminished income stream to meet the cost of future claims. Without the caps, indemnity subscription rates of consultants in whole-time private practice would have been greatly increased.

Under the cap scheme the State's clinical indemnity scheme covers claims over a certain cap or amount against private consultants arising from adverse clinical events occurring after 1 February 2004 in private hospitals. In July 2013, the Government agreed to continue to provide the cap scheme for another five-year period. It was also agreed that the caps would continue to be adjusted annually from 1 July 2014 in line with the consumer price index. The present cap rates are as follows: for obstetricians, neurosurgeons and orthopaedic surgeons undertaking spinal surgery €565,000 per claim, including damages and legal costs, subject to annual aggregate limit of €1.695 million per consultant; and for all other specialties, the limit is €1.13 million per claim, including damages and legal costs, with no aggregate limit.

The Medical Protection Society provides indemnity cover to the majority of medical consultants in Ireland. The MPS has notified the Department that it faces major challenges in maintaining a solvent indemnity fund for its Irish consultants and without an increase in premiums this year its income from premiums will not match its liabilities. It notified its members earlier this month that the membership fee for indemnity would increase by an average of around 42% for all members. The Department has been informed that approximately 1,000 consultants are affected - 350 in full time private practice and the rest have B consultant contracts which allows them part-time off-site private practice.

The cost of Irish clinical negligence claims is much higher than the cost in the UK. A major problem is the long period that it takes before Irish cases come to trial. This results in significant increases in awards and in legal costs. Legislation is being drafted by the Department of Justice and Equality to address various pre-trial aspects of litigation but the impact of a change in legislation on awards will not be seen for a number of years.

The Irish Hospital Consultants Association is seeking a reduction in the caps for low-risk specialties and for high-risk specialties in order to reduce the level of the increase in premiums for its members. It argues that if this is not done, consultants may be forced out of business, while others may pass on the increase to patients.

Changes cannot be made in the short term without an in-depth actuarial analysis of the impact of any change on the financial risk to the State of such change. The State Claims Agency, which manages the clinical indemnity scheme, has commissioned this analysis. Discussions are under way between Department officials and the State Claims Agency in this regard. Officials from my Department have also met representatives of the Irish Hospital Consultants Association and the Medical Protection Society about the issue.

It took months of consideration and assessment before the Government agreed in 2013 to the continuation of the caps and the Government decision stressed that a value-for-money review should be undertaken before any change was made to the scheme. At a time of huge financial pressure on the public system any change to the caps system for the consultants in private practice must be carefully considered and a Government decision would be needed to effect such change.