Ann Phelan (Carlow-Kilkenny, Labour) | Oireachtas source

Before I continue with my speech, I shall reply to some of the issues that were raised. We have an opportunity here to examine whether a more person centred approach can be taken for catastrophic injury cases. Currently, the State Claims Agency can only operate within the constraints of the tort system. With that the courts expect due process under a tort system which, in many cases, can take years. Therefore, reform of the tort system is a major part of the solution.

On the issue of narcolepsy claims, they have not been formulated by the lawyers acting on behalf of the claimants and no details of claims have been presented to the SCA. In reply to Senator Ó Domhnaill's comment, I can confirm that there has been no delay in paying out. The average time from settlement in court to the paying of claims is two weeks. On the issue of small claims, each year a number of smaller claims are referred by the State Claims Agency to Injuries Board Ireland, which can deal with and manage them more appropriately.

I shall return to the review. It will consider the proposed introduction of a no-fault system, particularly in terms of the potential cost implications for the State relative to the current claims system. The review will be conducted on the basis of the following core principles: proposals will not increase the overall amount of claim costs; and proposals will not increase the amounts being paid to undeserving cases, particularly at the expense of deserving cases. It is useful to note that the State Claims Agency is already subject to an external annual review process. The Department of Finance is considering expanding the next annual review to examine the issues in the Private Members' motion or, alternatively, conducting a review using existing Departmental resources. The review will be structured in a staged manner, incorporating an initial stage, so as to ensure the review itself is cost effective.

As Senators may be aware, the National Treasury Management Agency is designated as a State claims agency when performing the claims management and risk management functions delegated to it under the National Treasury Management Agency (Amendment) Act 2000.

The SCA's principal objectives are: while acting in the best interest of taxpayers, to act fairly and ethically in its dealings with people who have suffered injuries and who take legal actions against the State or State bodies, and the families of these people; and to implement targeted personal injury and property damage risk work programmes to mitigate litigation risk in State authorities and health care enterprises, in order to reduce the costs of future litigation against the State. The SCA's remit covers personal injury and third-party property damage risks and claims relating to certain State authorities. These include the State itself, Ministers, the Attorney General, the Health Service Executive, the voluntary health care sector, An Garda Síochána, the Irish Prison Service, the Defence Forces and community and comprehensive schools. It also manages third party costs arising from certain tribunals of inquiry.

Reflecting the performance of the State Claims Agency in recent years, the agency's remit was considerably extended in 2014. At that time the Government delegation to it the management of personal injury and third party property damage claims in respect of an additional 61 public bodies. The initiative brought the total number within the SCA's remit from 56 to 117. Another delegation by Government in June 2015 has further increased the number of public bodies within the SCA's remit to 129.

As of the end of August 2015, the SCA is managing approximately 8,000 active claims that are split between 3,000 clinical cases and 5,000 general cases. The State Claims Agency has a coherent policy for managing claims. In cases where the State is considered liable, the agency's approach is to settle these claims as expeditiously as possible and on fair and reasonable terms. In cases where liability is fully disputed the necessary resources are applied in defence of these claims. The SCA manages claims from their initial notification through to final resolution. Claims are investigated in a thorough and timely fashion in order to facilitate early decision-making in terms of liability and strategy.

It is welcome that the State Claims Agency resolves the majority of claims by negotiating a settlement, either directly with the plaintiff's legal team or through a process of mediation. It is particularly noteworthy, and I hope reassuring to the Seanad, that fewer than 3% of clinical negligence cases handled by the agency result in a contested court hearing.

In line with the Seanad motion, the agency already advocates mediation as a preferable alternative to the adversarial courts system for resolving clinical negligence cases. The SCA settled 13 clinical negligence cases by mediation in 2014 and offered mediation in many other cases. Unfortunately, the lawyers who represent some plaintiffs are implacably opposed to mediation as a means of resolving cases. As the portfolio of clinical claims matures year on year, the number of agreed settlements as a proportion of the total claims portfolio is expected to continue to rise as it did during the period 2009 and 2013.

In considering this matter, we must take full account of the costs of settlements. In 2014, the average cost of clinical claims resolved, including awards or settlements, and related legal and other costs, was €143,000, a fact we heard earlier, which can be compared with the figure of €183,000 in 2013. That means there has been a decrease of €40,000 per claim.General claims consist of personal injury - non-clinical - and third-party property damage claims. The SCA resolved almost 1,500 general claims during 2014 at a cost of €25 million. Each year, the SCA's actuaries project the annual cash flows required to settle claims for the various indemnity schemes handled by the SCA. Over the four-year period 2011 to 2014, total savings amounted to €197 million.

For clinical claims the State has assumed responsibility for the indemnification and management of clinical negligence claims arising from the diagnosis, treatment and care of patients in public health care enterprises and also a small number of claims through other schemes. Maternity services-related claims accounted for 23% of all new clinical claims and 61% of the outstanding estimated liability of all new claims due to the high values associated with these types of claims.

The SCA becomes involved in catastrophic-injury clinical negligence cases when legal proceedings are initiated, typically some years after the event that gives rise to the claim. From that point onwards, the SCA endeavours to ensure that the litigation is handled sensitively and as quickly as possible within the limitations of the tort system. Independent experts are engaged to explore the issues of liability, causation, condition, prognosis and the calculation of special damages. This inevitably takes time and is frustrating for plaintiffs and their families but where the resulting experts' evidence points to both a breach of duty and causation, the SCA moves to admit liability and settle the case as quickly as possible.

The net cost of managing ongoing active claims and the cost of resolving claims under the clinical indemnity scheme in 2014 was €104.6 million. This figure is projected to increase annually for the foreseeable future. While maternity services accounted for 23% of the volume of clinical claims made under the scheme in 2014, they represented 61% of the cost of the scheme.

Senators have called for a no-fault system of settlement and compensation in catastrophic injury cases and it is important to outline some of the facts on this matter. Ireland has a tort system to determine compensation in the cases of clinical indemnity claims. Under a no-fault approach, it is necessary only to prove that the injury was caused by a medical treatment and there is no need to establish blame or individual responsibility. A comprehensive literature review conducted by the Health Research Board for the Department of Health in 2011 concluded that the international experience suggested that a no-fault scheme needed to function as part of a country's larger health, social, legal and cultural system. If Ireland were to adopt a no-fault scheme, this would likely require a significant investment in and reform of both our health and social welfare systems. It recommended that modifying and improving the existing tort system using a selection of reforms as a more appropriate alternative in the current economic climate. This is the approach that is being adopted. In 2011 a review group in Scotland recommended introducing a no-fault scheme, where patients would not have to prove negligence. However, following a public consultation, concerns were raised about the potential costs and the complexities of the system and this led the Scottish Government to say in 2014 that it would be carrying out further work before such a scheme could be introduced.

An initial actuarial analysis in this country has been undertaken regarding running a compensation scheme for catastrophic injuries on a no-fault basis. This analysis indicated that, despite lower legal costs, the introduction of such a scheme would significantly increase the annual cost relative to the current tort system.

On the issue of State indemnity versus insurance, the SCA's analysis has demonstrated that the cost of managing claims on a pay-as-you-go basis is significantly lower than the premium cost of insuring the risk. In the past five years the SCA has been given authority to manage claims in this way in respect of the HSE, 17 voluntary hospitals and 44 other State authorities. It is estimated that insurance premium payments, in the region of €135 million, would have been paid from 2010 to 2014 in respect of these bodies. The SCA has expended less than €35 million resolving claims in the same period resulting in cash savings of €100 million to date which is approximately equivalent to 70% of the premiums which would have been paid.

I understand that the State Claims Agency has been reviewing the report of the Joint Committee on Health and Children on medical indemnity insurance costs. The committee's recommendations included a call for open disclosure, periodic payment orders and pre-action protocols be introduced. It also recommended that Government should examine measures requiring parties to consider mediation at an early stage in medical negligence cases. In order to modify the existing tort system and make it as user-friendly and as quick a process as possible, a suite of reform measures is being advanced which will result in a positive impact on those seeking compensation through the courts and particularly for those seeking compensation in cases of catastrophic injury. Work is under way in the Department of Justice and Equality on legislation to introduce pre-action protocols which will facilitate more efficient processing and conclusion of cases before and during the court phase. This is in everyone's interest, as it will considerably reduce the length of time that it takes to complete legal proceedings. This will in turn reduce the stress involved for plaintiffs in their cases. Another benefit is that the protocols will also reduce the cost of cases to the taxpayer in the longer term.

The State Claims Agency, on its own initiative, pioneered the introduction of periodic payment orders to compensate catastrophically injured victims in order to alleviate their families' worries relating to the guaranteed payment of their future care and other requirements throughout their lifetime. PPOs mean that a court may decide that catastrophically injured people can receive the cost of future care in the form of annual payments instead of a lump-sum award. Currently, PPOs may be awarded on a deferred basis pending the introduction of the legislation. The deferred PPO, however, may revert to a lump-sum payment at the discretion of the court. The SCA, to date, has settled approximately 36 catastrophic-injury cases on the basis of periodic payment orders. The Minister for Justice and Equality has stated that she will introduce periodic payment order legislation before the end of the year.

A national policy on open disclosure was developed by the HSE and the State Claims Agency and launched in 2013. The policy is designed to ensure an open, consistent approach to communicating with patients and their families when things go wrong in the provision of health care. The SCA, in conjunction with the HSE, piloted a significant open disclosure project which has been rolled out to 50 hospitals and nine community health care organisations countrywide. It includes expressing regret for what has happened, keeping the patient informed, and providing feedback on investigations and the steps taken to prevent a recurrence of the adverse event.

The priority for the health system following a catastrophic injury is to ensure that the person affected has his or her health needs comprehensively and professionally met. In this regard the HSE provides a range of services as quickly as possible, including access to long-term illness medical card, the availability of independent clinical advice, the organisation of individual pathways of care and the arrangement of appropriate follow-up.

The SCA's risk management objective and statutory duty, is to advise and assist State authorities and health care enterprises on measures to prevent, reduce and mitigate adverse events that could subsequently result in claims. The SCA's clinical risk management programme focuses on collaboration with risk managers and other personnel in health care enterprises to support patient safety.The personal injury and property damage risk management programme focuses on providing advice and support to State authorities and health care enterprises within its remit regarding risk management structures, maintenance of buildings, fire safety, health and safety and environmental management. The SCA provides a range of practical risk management services and advice to include: the hosting of the national incident management system, NIMS, a web-based database which facilitates the direct reporting of adverse events by State authorities and health care enterprises; the analysis of adverse events and claims data and the provision of this analysis to State authorities and health care enterprises in order to identify risk clusters; publication of risk management guidance and the provision of practical risk management tools; the provision of information and training by means of seminars and publications, including the SCA website and newsletters; the provision of risk management solutions directly to State authorities and health care enterprises in respect of specific macro risk issues; carrying out risk management reviews and assisting with the development and implementation of State authorities’ risk management policies and procedures; supporting the implementation of the SCA's recommendations issued to State authorities; and the provision of insurance indemnity and liability advice to State authorities and health care enterprises.

Each year the SCA carries out litigation risk management work programmes in association with client State authorities and health care enterprises. The Government has agreed that there will be a review of the State Claims Agency and how claims are handled. The review will consider the proposed introduction of a no-fault system, particularly in relation to the potential cost implications for the State relative to the current claims system. The review will be conducted on the basis of the core principles that proposals will not increase the overall amount of claims costs and that proposals will not increase the amount being paid to undeserving cases, particularly at the expense of the deserving cases.