Seanad debates

Wednesday, 7 October 2015

State Claims Agency: Motion

 

10:30 am

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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I welcome the Minister of State at the Department of Agriculture, Food and the Marine and the Department of Transport, Tourism and Sport, Deputy Ann Phelan, to the House and ask Senator John Whelan to move the motion.

Photo of Denis LandyDenis Landy (Labour)
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Am I seconding the motion?

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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Yes. Senator Landy will have six minutes. Senator Whelan has ten minutes.

Photo of John WhelanJohn Whelan (Labour)
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I move:

That Seanad Éireann: - commends the Government for the comprehensive and successful process of political reform upon which it is engaged;

- calls on the Government to consider engaging in further reform, in particular to consider a review of the role of the State Claims Agency;

- calls further on the Government to consider undertaking such a review, with a view to bringing to an end lengthy, arduous and costly litigation between citizens and State agencies, and to replacing an adversarial and confrontational legal culture with a more user-friendly, prompt, no-fault system of settlement and compensation.

I welcome my colleagues and particularly the Minister of State who is taking the motion. I thank the Government for accepting the motion without amendment and I gain some heart from that, that there may be an inkling of some movement on the Government side to actually look at this area. I thank Senator Landy for his support and interest in the matter. It is also great to see Senator Colm Burke here who has a direct professional knowledge and interest in this sphere.

I was contacted when this motion was tabled and asked what the motivation behind it was and what was going on. There is nothing going on but the motivation is quite simple and straightforward. I am always horrified, as I think most right-thinking people are, when I see the phrase "the State versus" on television or in the newspapers. I have always been of the view, perhaps naively, that the State should always have the interests of its citizens at heart. The State and its apparatus, functions and institutions should support and assist the citizen and intervene on citizens' behalf whenever they need it or when they are in distress or require support. This should be at the core of their value system and modus operandi.

Unfortunately that is not always the case. One would want to have a heart of stone some evenings while watching the 6 o'clock news. It is harrowing to watch and is all too frequent. This is something that Senator Bacik and I have discussed. On the day that we tabled this motion originally, yet another case unfolded on the front pages of our papers and on the 6 o'clock news in which yet another family were, in my opinion, unnecessarily dragged through the courts to seek justice. Very often this is after years of trying to achieve fair play on behalf of their family or children. We must bring this to an end. It is unnecessary as are the legal costs and the legal treadmill that we set in motion when the State takes an adversarial and obstructive position against the interests of the individual. This is clearly a David and Goliath struggle because most families do not want to be in court. They certainly do not want to end up in the High Court for years on end through no fault of their own to seek justice and a settlement and compensation on behalf of their children. Very often we add insult to injury by dragging the case out.

The State is not acting in my name or on my or our behalf when it does this so I do not know from where this culture and system emerged. We could perhaps easily point a finger at the legal fraternity. That would be unfair. We could point a finger, perhaps, at the insurance industry where the culture is to accept nothing, to own up to nothing, not to accept any fault, blame or liability and to let a case drag on. Very often the plaintiff is the small person in the equation, with little or no resources, taking on the giant, which is the apparatus of the State, which is deemed to have deep pockets. Those deep pockets are the pockets of the Irish taxpayer.

Photo of John WhelanJohn Whelan (Labour)
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Those deep pockets are not to be used to frustrate fair play, common sense and natural justice when a wrong has been done, perhaps by mistake, misadventure or some mishap. This is not a question of apportioning blame. It is a question of seeking to change a culture and system which has at its heart a default opening position where the State will go to war against its citizens, very often to find itself five or even ten years down the road eventually accepting liability, apologising and paying compensation. All that has happened in the intervening years is to prolong the trauma and the harrowing process for families and their children, not only the child that is directly affected but his or her siblings. Can you imagine the stress and trauma and pummelling in that family home as people try to cope, again through no fault of their own? Eventually they get a lame apology and belated compensation. While compensation is all very fine and good, it is very often paid when the child is into his or her teenage years or even young adulthood and the intervening years have been lost. We all know the importance of early intervention, supports and services that cannot be reclaimed afterwards. Very often the damage cannot be undone because of the delay.

What I seek is for some common sense and compassion to be introduced into this culture so that the State Claims Agency acts on behalf of its citizens and not in conflict with them. We must remember that the State Claims Agency operates under the mandate of the Oireachtas and the Legislature so the responsibility ultimately rests with us to change that system and we can do so. I am not saying we should throw it out, I am saying we should reform it. We can have a hybrid system. Why do we not have mediation? Why do we not have independent arbitration first before we go into the long, arduous process of a difficult court case? I have been told by members of the legal fraternity that very often the only thing agreed when they take a case in good faith on behalf of a plaintiff is the name of the plaintiff and that they are actually standing in court that day. They step back from everything else and have to slog it out and prove everything, every minutia, every iota, every step of the way for years on end, while the case drags through the High Court in the name of the State. They are certainly not doing it on our behalf and in our names. This is wrong.

There is an opportunity here not only to save tens of millions of euro on behalf of the taxpayer, because that is the kind of bill that we are looking at. We can also show our citizens that the apparatus of the State is not pitched against them but is there to help and support them, and that it is accepted that we were wrong and that the damage has been done. It is possible to accept such in a no-fault scenario. This system works very well in Australia, for instance. We can have a situation in which people can receive interim settlements, periodic payments, and a settlement and compensation where no fault is ascribed or sought.It removes the need for families to be unnecessarily dragged through the courts, where they could run up hefty legal bills and run the risk of losing and having to pay costs to the other side, namely, the State. Institutions of the State such as EirGrid and An Bord Pleanála are increasingly being pitched against our own citizens and communities in the courts, which is wrong.

The State Claims Agency represents 129 different apparatuses, bodies and institutions of the State. It currently has over 7,000 cases on its books, with a potential liability of €1.5 billion. We have done our research here and we can see that the pattern has been the same over the past decade. On average, settlements are now reaching in the order of €100 million per annum. A further 50% is being added to those settlements in the context of legal costs and expenditure on behalf of the State Claims Agency and plaintiffs.

This is a very straightforward proposition. We are asking that the system, particularly in the area of medical negligence, be reformed. It would be a win-win situation for families, citizens, communities, the courts system and even the insurance industry. The adversarial approach means that insurance premiums are skyrocketing. My colleagues who are qualified in law will speak to this. It has reached the point where insurance companies have refused cover to surgeons and consultants. There is no end in sight.

I am aware that a further round of cases is listed on the courts' schedule for early next year. The parents taking them do not want to go to court. They want to sit down with the HSE and reach a fair and reasonable settlement. Their children have been inflicted with narcolepsy as a result of the swine flu vaccine which the State administered, albeit in good faith. It is accepted that the vaccine has had a profoundly negative impact on these young people's lives. Many of them have now gone through school and college and are young adults, and are still waiting for the State to put its hands up and admit it made a mistake and offer to help. Instead of that, the State is fighting them tooth and nail. It is not being honest and it is going to drag these citizens through the High Court.

We will see the outcome on the six o'clock news - we will pay out millions, eventually apologise and pay the lawyers more and more in the process. The apology will be lame and pointless for the families who have had to endure this system. We cannot wash our hands of it or say it has nothing to do with us. I implore the Minister of State to use her good offices in order that action will be taken to reform the State Claims Agency. Families should have the option of an alternative system in the form of a no-fault settlement process under mediation.

Photo of Denis LandyDenis Landy (Labour)
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I second the motion.

I am old enough to remember the ambulance chasing that went on in the 1980s and 1990s, and the State's consideration of the situation pertaining to claims against it. It was against that backdrop that the State Claims Agency was established in 2000 under the National Treasury Management Agency, NTMA. The purpose set out then was: to manage personal injury, property damage, and clinical negligence claims; provide risk management services on the State's behalf and minimise its exposure; and deal with third-party costs in certain tribunals.

The State Claims Agency is answerable to the Committee of Public Accounts and the Attorney General. In its 2014 annual report, it states that it "acts in the best interest of taxpayers" in minimising claims exposures. It also states that it seeks "to act ethically and fairly in its dealings with people who have suffered injuries and take legal action against the State", and that it resolves, by negotiation and mediation, all but 3% of the cases it deals with. As stated by Senator Whelan, there are 129 public bodies within the remit of the SCA. Currently, the agency employs 91 staff. So far so good, but in the next section of the report we discover there are no figures available for the amounts paid to firms or individuals that provide services to the SCA. They are exempt under freedom of information. We also discover that there is an additional 50% in costs, on top of the cost of the payouts, charged on an annual basis.

The general claims liability in 2014 was €309 million, and clinical liability was €1.16 billion. "Clinical" refers to maternity services, medicine, surgery, gynaecology and radiology. What is the issue? As Senator Whelan has outlined very articulately, there is unnecessary time wasting. Individuals, families, and, indeed, the families of deceased people have been dragged - for ten years in some cases - through processes that are eventually settled either on the steps of the court or in court. This has caused destruction to the lives of these people. It is David versus Goliath.

The SCA acts on behalf of the State but, as we know, the public rightly sees the State through its legislators - us, the people in this room and those in the Lower House. I have often watched the six o'clock news and seen the situation outside the Four Courts, when young children were brought out in wheelchairs with their parents and solicitors. It was the State that put them through that trauma. That State, in the eyes of the public, is us.

It is time to stop this. The system that is in place may have dealt with a particular issue that occurred in the 1980s and 1990s, but it now needs to be reformed. It is no longer good enough to say we have to go through a process or that the law will take its course. In most cases, the claims are uncontested but still the families are required to undergo a process that can last ten, 12 or 15 years. Parents who are unfortunate enough to have a child born with some difficulty as a result of medical negligence should not have to wait until the child is a teenager to get on with their lives. It should be dealt with immediately, in good time and properly. Negligence is accepted in most of these cases, yet lives are practically ruined and destroyed for ever.

As legislators we need to start the process of reform of the State Claims Agency. We need to bring in the people who are working with it as well as representatives from the Department of Finance, which is the responsible Department, to see how we can do this better. There are people making money out of it. While that is not the sole purpose of what we are doing, the fact that 50% extra on top of the claims is paid out for various costs needs to be looked at and we are responsible. Insurance costs are spiralling and this is part of the reason. As legislators, we are responsible to the taxpayer for the money we are spending. We need to stop, take account of what is going on and start the process of reform.I look forward to the Minister's response. By putting forward the motion today, Senator John Whelan and I have started the process and I hope we can see it through and bring forward a better process and system. The agency does not need to be scrapped, but it does need to be reformed for a better system to be put in place.

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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The first sentence of the motion reads, "That Seanad Eireann: commends the Government for the comprehensive and successful process of political reform upon which it is engaged." That is something with which I cannot concur. I primarily concur with the reference in the second paragraph to the effort made to reduce State expenditure. Before the Government took office, significant emphasis was placed by both parties on serious political reform. Almost five years later there has been a significant missed opportunity in that regard. The saying goes that charity begins at home, to which I add that political reform should start in the Houses of the Oireachtas. There was a major opportunity to reform the Seanad, but instead of going down that road, the Taoiseach decided to abolish it and, as he said himself, the people gave him a wallop. Because of the way it was done, meaningful Seanad reform will be more difficult to achieve. It will not happen in the lifetime of the Government, or even the lifetime of the next. The Taoiseach should have put the question to the people of whether they wanted to have a reformed Seanad. If they had voted in favour of that question, it would have strengthened his hand and that of the Cabinet and both Houses to implement proper reform.

This Private Members’ motion comes again the backdrop of serious failures by the Government to introduce real political reform across the board and of policy making. The Government’s record has been of a smokescreen of changes, leading to a greater centralisation of power in fewer and fewer hands. In order words, four people call the shots in the Oireachtas, namely, the Taoiseach, the Tánaiste, the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, and the Minister for Finance, Deputy Michael Noonan. That is the reality. It is not democratic and not good. It is not good for any Government. One can forget about the current situation. It was an issue before and needs to be dealt with.

In Dáil Éireann the Government has completely broken its promise of new politics in a damning indictment of its commitment to reform. It is systematically breaking its programme for Government pledge not to guillotine the debates on Bills, with the debates on 63% of legislation being guillotined to date. For example, the ramming through of the Irish Water legislation in a single day in the week before Christmas is a typical example of how not to reform the Oireachtas. The Government has failed to implement its programme for Government commitment to allow two weeks between Stages of Bills in 78% of cases. That is not reform. Topical Issue debates are completely undermined in the other House by the failure of relevant Ministers to turn up in more than 40% of cases. The Friday sitting farce is mere window dressing to bolster the number of sitting days without any real debate. The Government continues to engage in cronyism and State board appointments by ignoring the open public process. When we did this in the past, we were severely criticised. Prior to the general election the Government parties stated they would do things differently, but they have not done so. The recent raft of Dáil measures taken without consultation will disempower the Opposition and give more time for Government back-slapping by its own backbenchers.

Let us examine the back-tracking on the Constitutional Convention. It was supposed to be the major opportunity to engage in constitutional reform, but little has happened. There was a failure to abolish the Seanad. I am grateful the people rejected the proposal. The proposal to reduce the age of eligibility for presidential candidates from 35 years to 21 was a cynical tease to young people that failed dismally. It was an inappropriate proposition to put to the people.

I concur with much of what Senator John Whelan said about the State Claims Agency. I agree that too much money is being paid out and the system needs to be reformed. When the former Minister, Ms Mary Harney, under a previous Government, introduced the Personal Injury Assessment Board, PIAB, it resulted in considerable savings to the State. The cost of most forms of insurance reduced by more than 60%. That is a model that could be followed.

The State Claims Agency has responsibility for the management of personal injury and property damage claims against the State. The total paid out in 2014 was €86.5 million. In addition, it paid out a whopping €54.5 million, mainly in legal fees. That means that for every €1,000 paid to claimants, many of whom had suffered life-changing events, as Senators John Whelan and Denis Landy outlined, the agency paid out an additional €620 in legal and other costs. In other words, for every €100 million paid out, an additional €62 million was expended on legal and other costs. I totally agree with the proposer of the motion that this is not tenable. The balance of amounts paid to claimants compared with the payments made to the legal profession is all wrong. More of the payments made by the State Claims Agency should go to claimants, not to the legal profession. I am aware of a case where a farmer took on the Department of Agriculture, Food and the Marine and it dragged on for seven years. The farmer’s health suffered and eventually the Department conceded at the door to the courthouse. It could have done this in the first 12 months and saved the farmer stress, anxiety, depression and worry over a six-year period and also saved money for the State.

In August 2012 the State Claims Agency announced a new procurement structure for legal fees. Despite assertions by the agency, that structure has failed as the total amount spent on legal fees has rocketed since, from €39 million in 2012 to €42 million in 2013 and nearly €50 million in 2014. Instead of saving money, the level of expenditure has moved in the other direction. It is public money that could be better spent in other areas of need. The agency must go back to the drawing board to come up with a formula to rein in such costs. If need be, the State should consider introducing legislation under which solicitors and barristers could be employed directly on a salary to handle cases. The days of the legal profession hiding behind restrictive practices must be brought to an end and I speak as a member of the profession. There is no doubt that there are thousands of young solicitors and barristers. I met one of them when coming from the airport one day and he was driving a taxi. When we began talking, he said he was a barrister. He had no work and was driving a taxi. Why could the likes of him not be employed by the State Claims Agency? Such persons could be employed for less than 25% of what some of the boys are paid in the Four Courts and would do as good a job if they were trained and brought into the system.

In the context of real reform, Fianna Fáil has committed to finding common ground to develop a consensual approach to reform of the Upper House. It is imperative that the Government use this as the starting point for the introduction of genuine reform, not just the severely restricted Bill it has published to broaden the voting rights of university graduates. It is a pure sham. Reform must encompass a broader approach to all tiers of the State in order to reshape the structure of politics to make it fit for purpose in the 21st century. My party has also published detailed documents on the reform of Dáil Éireann and the system of local government. Such holistic reform is critical to genuinely change how we do politics in Ireland. As the Government continues to move to abolish town councils and slash local democracy, the need for real reform is more apparent than ever.

There are two parts to the motion and while I fully concur with the second part, I have great reservations about the first. One could argue that the party with which I have been involved for the past 15 to 20 years did not bring forward meaningful reforms either, but the public was acutely aware of this prior to the previous general election. As a result of the financial crash, their attitude towards politics and disdain for politicians, councillors, Senators and Deputies is widespread. We will face a general election shortly. I am reliably informed today that it will not occur until after Lá Fhéile Bríde an bhliain seo chugainn, le cúnamh Dé, which is of solace to me.

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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That is a matter for the Taoiseach.

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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What is required is a serious attempt by the Government at meaningful reform of these Houses. Senator John Whelan’s motion, supported by Senator Denis Landy and the Labour Party and probably by the Government, is very important and valid, but it is a tiny rung on the ladder towards total political reform. We are not grasping the nettle. Unless we do so, whoever will be here will face the wrath of the people in the next general election or the following one.

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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Perhaps the Senator might get the information in writing, signed by the Taoiseach, on when the general election will be called.

Photo of Colm BurkeColm Burke (Fine Gael)
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I welcome the Minister. I thank the Senators concerned for bringing forward the motion. It is grand to talk about reform, but what is important is to carry it out. It is almost the fifth anniversary of a report by the working group on medical negligence and periodic payments which was dated 29 October 2010.To date that report has not been implemented. Blaming the legal profession for the lack of reform is not right. The legal profession wants reform, but the Government's reaction in this regard has been slow. The Law Reform Commission's report on periodic payments was published almost 20 years ago in 1996. The Minister for Justice and Equality recently published the heads of the Civil Liability (Amendment) Bill which will allow a court to award indexed linked annual payments instead of a lump sum to cover future costs in respect of a serious injury. Progress is being made, but it is very slow. There is a need for reform, but it is important in the context of our discussion on the State Claims Agency that we are fair to it. For example, in a case reported in the past two years there was a nine year gap between the time the person was born and when the compensation was paid. While the States Claims Agency was severely criticised for the delay in that case, very little had been done on the plaintiff's side during the first seven years. When the matter came to the agency's attention, it was dealt with as expeditiously as possible within a two year timeframe. We are often too quick to criticise the agency which does not have a right of reply.

Another interesting point in relation to the State Claims Agency, with which I have been in correspondence on various issues, is that while a claim may be worth €5 million, the settlement amount can be €15 million. We do not hear about this; we hear only about the award made. The agency's role is also to protect taxpayers. I am not suggesting it is the plaintiffs who are demanding high settlements. It is often the case that those acting for them are being unreasonable. A case might be before the High Court for three or four weeks and nobody is aware of what budgets might be available until the first three or four days of the case are over. It is only then that people come to the table to try to settle matters. It is important to bear in mind that these are the issues which the State Claims Agency has to examine.

The main issue in this debate is that of periodic payments. Under the current system lump sums are awarded which often turn out to be inadequate because costs have risen, but there is no opportunity to return to the courts. For this reason, the recently published heads of the Civil Liability (Amendment) Bill are welcome, as we have been talking about addressing this issue for over 20 years. It is welcome that some progress is being made at last. Some countries introduced periodic payments in the 1960s and the system is working effectively for them.

I agree with Senators John Whelan and Denis Landy that it is important to ensure an award is made available at an early stage in order that the injured party can access all of the services he or she requires. One of the biggest problems in medical negligence cases has been that because of lengthy delays in settling cases plaintiffs have not obtained full benefits at an early stage. This issue needs to be addressed.

In New South Wales a lifetime care and support scheme, rather than a lump sum scheme, is in place. The lifetime care and support scheme meets the cost to the injured person of medical treatment, rehabilitation, respite care, attendant care services, aids and appliances and home and vehicle modifications. We need to look at alternatives to the current system. I am not convinced that it is doing everything possible for the person who has suffered injuries. While in some instances it does, in others it does not. We need to examine all of these issues in the context of reform and find a comprehensive way of addressing the matter. I hope the Civil Liability (Amendment) Bill will progress quickly through the Houses. It is important legislation, but it is also important that we get this right and that we review how periodic payments have worked in other jurisdictions.

On the "no fault" system, actuarial work has been done on it. I understand that under that system, costs rise substantially. According to one of the documents I received, they could increase by up to 50%. It is important to bear this in mind.

On the cost of clinical claims resolved, in 2014 the average cost was €143,000, a decrease of €40,000 on the figure for 2013. This means that the average cost has reduced from €183,000 to €143,000, including legal costs. It is important that there be a recognition of the work being done by the State Claims Agency.

On compensation and the current position on medical practitioners, the cost of insurance for a privately operating orthopaedic consultant is €104,000 per annum. This means that a private hospital wishing to employ an orthopaedic consultant must pay an upfront premium of €104,000 per annum, or €2,000 per week. In some cases, private hospitals are having difficulty recruiting consultants. This issue and that of capping levels in what the State will cover need to be addressed in the next few months.

Photo of Kathryn ReillyKathryn Reilly (Sinn Fein)
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There are parts of this Private Members' motion which Sinn Féin supports, including the call for an open practice of acknowledgement of wrongdoing by the State in instances where it, its agents or those employed to deliver its services have been responsible for wrongdoing or injury. There are other aspects of the motion, however, that we do not support, including its commendation of the Government for its comprehensive and successful political reform. It is disingenuous to include a call for such commendation in a motion which seeks a review of the State Claims Agency which nobody can deny is in need of reform.

The endemic culture of deny and defend in respect of State claims must be rooted out, particularly within the health service. Not only is this culture grossly wrong, it is also immensely harmful and hurtful to victims and their families. To err is human. Where an error occurs, it should be acknowledged, an apology should be given and the issue should be addressed, with adequate and fair compensation for the victims and their families through compassionate dialogue and negotiation, rather than by way of confrontational litigation that can be unfair and often causes distress to the victims and their families and results in increased legal costs.

On the no fault system of settlement and compensation, the State is at fault in these cases. I do not believe people take cases against the State lightly. Therefore, the cost of settlement and compensation falls at the State's door. The State Claims Agency has been involved in cases in which it knew it was wrong, but it continued to deny responsibility and defend its position, thus forcing victims to engage in lengthy and costly court cases. We would welcome a swifter and simpler claims process between citizens and State agencies. We would also welcome an open practice of acknowledgement when the State is in the wrong and adequate redress for survivors and victims of the State's wrongdoings.

I would do a disservice to the survivors of symphysiotomy, the victims of the Magdalen laundries and industrial schools and brave citizens such as Louise O'Keeffe if I did not highlight some of the hypocrisy at play. It was mentioned that the State Claims Agency was accountable to the Oireachtas and that the buck essentially stopped here. Fine Gael and the Labour Party are in government. This Private Members' motion was moved by a member of the Labour Party, which has participated in a Government that looked on as the HSE continued to follow a practice of deny and defend, resulting in families being forced through the courts in their search for justice and appropriate settlement before wrongdoing was admitted, including Louise O'Keeffe who was forced all the way to the European court to get justice.It has participated in a Government that refused to facilitate the passage of a Bill to lift the Statute of Limitations for the survivors of symphysiotomy and, subsequently, offered redress schemes, which many of them still claim are inadequate and insulting, and that excluded certain Magdalen laundries from a State inquiry while ignoring the recommendations of Mr. Justice Quirke in respect of the victims. It proposed a redress Bill that it knew was unacceptable to some of the victims.

We also have to examine the Labour Party's actions in government. Over the term of this Government, it did not try at any stage to make settlement and compensation less adversarial or confrontational between citizens and State agencies, particularly for Louise O'Keeffe, symphysiotomy survivors, Magdalen laundries' victims and many more. When it comes to the David and Goliath battle, Fine Gael and the Labour Party have been on the side of Goliath while the little person battles. The inverse has been the case. The Labour Party has contributed to making settlement lengthier and more arduous, costly, adversarial and confrontational. We support a fairer and less adversarial and confrontational system of settlement and compensation and we call on the State to fully admit responsibility when it is at fault.

Why was the motion not before the House four years ago or sooner? Why are we only seeing it in the dying days of the Government? The motion also includes a self-congratulatory line on the Government's so-called "comprehensive political reform". That is disingenuous and I do not accept that. We accept the initial part of the motion, but not the latter part.

Photo of John KellyJohn Kelly (Labour)
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I support the motion. Senators Whelan and Landy have put a compelling case for the reform of the State Claims Agency. We do not experience the trauma families suffer until such time, as they rightly point out, we see them coming out of court on the "Six-One News". The sense of relief on their faces is evident because of the trauma they have been put through for so many years. There seems to be a mentality of battening down the hatches whenever there is a claim and liability is never admitted. As a result, there are significant litigation costs resulting in the taxpayer paying 50% more in these claims. Who makes the decisions to frustrate families? Is it the legal system or the insurance companies, as Senator Whelan suggested?

For instance, I dealt with a small developer who built too many houses on a housing estate. He asked whether his development levies would be refunded by the local authority if he knocked ten houses. I spoke to a number of officials and they said that if he knocked the ten houses and did A, B, and C, they would give him his money back. A year later, after all that was done, no money had come through and out of pure frustration, he sent them a solicitor's letter. The response was to batten down the hatches. The legal advice from the local authority's solicitor was not to deal with the developer anymore and to leave it to him. That is the beginning of a process that will cost the council a fortune and, eventually, it will have to pay the bill. I will be a witness in the case because I was given commitments that the levies would be refunded.

This is an example of what is happening. I do not know why these cases happen or how they are brought about but it costs the State 50% more because the legal system can stifle a sensible outcome in such cases. This small developer to whom I referred is willing to pick up the telephone and resolve the case with an official but the local authority is not willing to do this on legal advice. I support the motion and I compliment my two colleagues for tabling it.

Photo of Brian Ó DomhnaillBrian Ó Domhnaill (Fianna Fail)
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I welcome the Minister of State. This is a good motion. I disagree with the first part of it, although I wholeheartedly agree with the second part. The motion commends the Government in respect of political reform. The Government has engaged in political reform over the past few years, although it has only tinkered around the edges. Most of the reform focused on local government, the funding of which has been depleted by 300% since the Government took office. The sector is now only in receipt of €1.7 billion, according to the Comptroller and Auditor General's report last week. The effect of that has been the stripping away of services from local government and local democracy. That has not done the political process any good and it has taken accountability away from elected people, which is also not good.

In general, politics has to change. As my colleague, Senator O'Donovan, said, the decision-making capabilities of the State are controlled largely by the four economic Ministers within government and then the Cabinet. The Dáil and Seanad have little input into the decision-making processes of the State. Much of the Dáil's time is devoted to responding to parliamentary questions and Topical Issues instead of cutting to the chase and discussing the meat on the bone of what is happening in our country. I do not only blame the current Government for that; I blame my own party as well when it was in government. This goes much deeper than one party or another. It is something fundamental about the way we practice politics and until that changes, our democracy will always be captured by special interests.That is happening in Ireland and in other western democracies. When decision-making is centralised in the hands of so few people, it is much easier for vested interests to capture them. It is described as "rent seeking behaviour" in economic terms and this is alive and well, unfortunately, in this country.

We only have to refer to the legal profession. The Government dined á la carteon the troika's recommendations in respect of meaningful reform of our institutions, including challenging legal costs to the State and ordinary punters. We must also examine other reforms to give councillors power and accountability instead of stripping them away and to separate the role of national legislators from local administrators. Ultimately, it is wrong that Oireachtas Members must compete with local councillors for votes. We must break out from that system and consider alternatives.

The number of outstanding cases with the State Claims Agency is alarming, according to its annual report. There were 7,221 active claims outstanding at the end of 2014 with a value of €1.469 billion. When the figures are broken down, it is evident that legal costs are increasing instead of decreasing. They increased from €39 million in 2012 to €50 million in 2014. Figures produced this week by the HSE showed an alarming increase in claims against it. The executive came under the remit of the State Claims Agency in 2010. The total paid out in claims against the HSE in 2012 was €83 million. It increased to €125 million in 2013 and €124.5 million in 2014. These were mainly clinical claims. These claims, obviously, need to be managed but, unfortunately, that is resulting in delays in payments to those who need them. The outstanding value of claims is almost €1.5 billion but, generally, between €100 million and €200 million is paid out annually. The legal system manages the payout of the claims. While some claims may prove to be fruitless, claimants are experiencing delays of up to five years. There has to be a better system. The legal profession must be taken out of the equation and a better mechanism to deal with claims must be found. There will be cases where the profession has to intervene on behalf of individuals but, by and large, it is directing the way in which these claims are handled.Out of every €1,000 paid out in respect of a claim, for example, an additional €650 will go to the legal profession, which is fundamentally wrong. It means that out of every €1 million paid out in claims, €650,000 will go to the legal profession. The troika raised this issue in 2009-2010 and I was in total agreement with what it stated. The link between the legal profession and politics has always been strong in this State. Unfortunately, no Minister has been strong enough to take on the system. Yes, I might be castigated for saying this in the House but it must be said. Until the link is broken, and until those who need the money get it and those in the legal profession stop lining their pockets, then a major issue will continue to exist. The taxpayer is also down revenue as a result of this situation. The matter must be addressed. I ask that the Government deals with the issue and this evening's motion is important in that regard. Unfortunately, the Government has almost reached the end of its term. I heard Senator O'Donovan say that an election will not take place until next year and after St. Brigid's Day. Perhaps he has information that the rest of us await.

Photo of Denis LandyDenis Landy (Labour)
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The Senator's canvassing of the council has started here.

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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I wish to inform Senator Ó Domhnaill that his time is up. The date of the general election is a matter for the Taoiseach and he is not a member of the Upper House.

Photo of Brian Ó DomhnaillBrian Ó Domhnaill (Fianna Fail)
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My final comment will be on political reform. Let us take the speculation out of politics. Let us reform a simple thing such as the nature of Dáil terms. Why not have a fixed term of either four or five years? The measure would remove speculation and provide consistency like that available across the water, where a certain percentage of members can vote. It would be a much better system. There are ways we can reform politics. Unless we reform things properly and independently, we will end up with the same type of reform which occurred in the local government sector and which has achieved nothing.

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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I thank Senator Ó Domhnaill.

Photo of Colm BurkeColm Burke (Fine Gael)
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We would have been in some mess if we had left Senator Ó Domhnaill's party in government for five years.

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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The Senator had his opportunity to contribute and his points were well made.

Photo of Colm BurkeColm Burke (Fine Gael)
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I agree but I could not resist.

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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I call on the Minister of State to reply.

Photo of Ann PhelanAnn Phelan (Carlow-Kilkenny, Labour)
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The debate up to now has been very reasoned. I would like to congratulate my Labour Party colleagues on bringing forward the motion. In response to the point made that it has taken us four and half years to get the motion on the table, anybody could have tabled the motion. Therefore, the Labour Party must be congratulated on doing so.

The Labour Party has tabled a Seanad Private Members' motion which seeks a review of the State Claims Agency, SCA, with a view to the introduction of a more user-friendly, prompt and no-fault system of settlement and compensation. I am happy to inform Senators that, following discussions between the Minister for Finance and the chief executive of the National Treasury Management Agency, the Government has agreed that there will be a review of the State Claims Agency and how claims are handled.

Photo of Denis LandyDenis Landy (Labour)
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Hear, hear. That is very good.

Photo of Ann PhelanAnn Phelan (Carlow-Kilkenny, Labour)
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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.

Photo of Pat O'NeillPat O'Neill (Fine Gael)
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I thank the Minister of State. I call Senator Whelan to conclude the debate.

Photo of John WhelanJohn Whelan (Labour)
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I welcome the Minister of State, Deputy Phelan. If I thought the House would get as constructive, comprehensive and positive a reply to all motions then I would put one down every day. I thank colleagues on all sides of the House for their contributions and input. It was important to air this subject. We had no prior knowledge of the work going on behind the scenes in the two lead Departments on this issue – the Department of Justice and Equality and the Department of Finance – and I welcome that information. As Senator Colm Burke has said, we have been waiting on legislative movement on the periodic payments issue. To be fair to the legal fraternity, which I have often beat up on, it has been pushing for that change for the last 20 years. It would be great to see it finally addressed in legislation rather than just in a voluntary, pilot fashion.

I take into account what the Minister of State has said regarding the range of other reforms in terms of open disclosures and the different approach now being taken, but the substantive issue is that the Government has put on the record formally here that a substantive and significant reform of the process is under way and will result in legislation being introduced later this year. This is welcome and I hope we are all still around to see that.

Reform is a slow moving train but I would at least like to nudge it out of the sidings in this regard. I would also wish to replace the equally slow moving gravy train that can get caught up in some cases. Regardless of what some colleagues might think, I am not having a cheap cut off anyone, but there are some outrageous examples of protracted cases log-jammed in the High Court which run up unnecessary legal bills. This is not good for the State or the citizen. I do not wish to disrespect the Minister of State's reply but the next case coming down the tracks relates to the swine flu vaccine and the resulting instances of narcolepsy experienced in some families. Unfortunately, because of the current system, the HSE and the Department of Health are not engaging with the families. This matter will therefore end up in the courts. I would like to see it perhaps being an example of the courts being avoided. I understand that the families would prefer that.

I will now turn to the other points made by colleagues. I do not wish to get bogged down in an adversarial situation, but I have to put on the record that it is unfair that while some reforms have been slow in coming, the Minister for Public Expenditure and Reform, Deputy Howlin, has achieved significant reforms in other areas. We have had, for example, the following: reform in the areas of freedom of information; the introduction of an independent charities regulator; an independent Garda authority; the register of lobbyists; and transparency in appointments to State boards and invitations being sought. So it is not true to say there has been no significant reform. We have made significant progress and, along with colleagues, I keenly await the progress on Seanad reform.

The expert working group on Seanad reform, which includes former colleagues from this House, Dr. Maurice Manning, Mr. Pat Magner and Mr. Joe O'Toole, has brought forward proposals which deserve serious consideration. I think the recommendations are worthy and deserve to be implemented. I would like to see this reform happening but it does take time to address these matters. This Government has achieved significant reforms and it would be unfair not to put this on the record. Unfortunately and typically Sinn Féin has done what it always does, namely, it has left the building. They shoot first and then don’t even ask questions, they leave the building and do not wait for anyone else’s view or explanation. The only courts in which they seem to want to represent anyone are kangaroo courts. I will certainly not take any lecture from anyone in Sinn Féin regarding its concern for the small person. I saw no interest from Sinn Féin in the case of Maíria Cahill when she turned to them for help and assistance. I shall treat the Sinn Féin tuppence worth here today with the contempt it deserves.

I conclude by thanking the Minister of State, Deputy Phelan, for bringing to the House the good news that reform of this system is under way and that significant legislation is on its way. Hopefully that will result in a change of approach and a change of culture which will be good news for everyone.

Question put and agreed to.

The Seanad adjourned at 6.20 p.m. until 10.30 a.m. on Thursday, 8 October 2015.