Managing a Complex and Diverse Claims Portfolio

Resolving Clinical Claims

Maternity Services - A Risk Management Priority

Reducing Legal Costs

Enhancing Risk Management

The NTMA is designated as the State Claims Agency (SCA) when managing claims against the State and State authorities and carrying out related risk management functions 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 139 State authorities including the State itself, Government Ministers, the Attorney General, the Health Service Executive, the voluntary healthcare 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 and claims for legal costs by parties who have successfully sued the State in respect of personal injury and other non-personal injury related actions.

Claims and Litigation Management

The SCA’s claims management objective is, while acting in the best interest of taxpayers in matters of personal injury and property damage litigation, to act fairly and ethically in its dealings with people who have suffered injuries and/or damage and who take legal actions against the State or State bodies, and their families. In cases where the SCA investigation concludes that the relevant State authority bears some or all liability, it seeks to settle claims expeditiously and on fair and reasonable terms. If it considers that the State is not liable, the SCA’s policy is to apply all necessary resources to defend the claims.

Active Claims End-2016

The SCA managed 8,898 active claims with an estimated outstanding liability of €2.2bn at end-2016.

Maternity services claims comprised €1.09bn or 65% of the total estimated outstanding clinical claims liability at end-2016. The high estimated liability associated with maternity services claims relates principally to the high cost of settling catastrophic brain-injury infant cases.

The total estimated outstanding liability of €2.2bn takes account of the Court of Appeal Decision in Gill Russell v HSE, following which the SCA sought Leave to Appeal to the Supreme Court. The Court of Appeal had held that the Real Rate of Return (RRR) in respect of the calculation of future care special damages should be 1%. It also held that the RRR in respect of all pecuniary losses should be 1.5%. The RRR used previously to calculate estimated outstanding liability was 3%. The Supreme Court, in its determination of 1 February 2017, refused Leave to Appeal the Court of Appeal’s decision.

The SCA received 2,889 claims and resolved 2,306 claims in 2016. The volume of new general claims received has been driven by mass action claims and, principally, the high number of in-cell sanitation claims taken by current and former prisoners against the Irish Prison Service. This has led to a significant increase in claims received since 2014. By contrast, the volume of new clinical claims has remained relatively constant. The earlier years’ spike in claims volume, seen in 2012 and 2013, relate, in the main, to symphysiotomy litigation.

The cost of resolving and managing on-going active claims in 2016 was €251.5m compared with €221.7m in 2015. The 2016 out-turn represents a saving of 8.8% against the independent actuarial assessment of €275.7m.

Resolving Clinical Claims

The SCA resolves the majority of claims by negotiating a settlement, either directly with the plaintiff’s legal advisors or through a process of mediation: 98% of clinical negligence cases handled by the SCA are settled without the necessity for a contested court hearing. During 2016, the courts found in the SCA’s favour in all three clinical claims that were court contested.

Statutory Reforms concerning the Resolution of Clinical Claims

The Legal Services Regulation Act 2015 included three significant provisions to assist in the management of clinical negligence cases and reduce the number of cases that go to trial. These were:

• Provision for Ministerial power to make regulations for Pre-Action Protocols to facilitate timely communication between plaintiff and defendant and early identification of issues in dispute and to encourage early settlement.
• Provision that an apology by a medical practitioner does not constitute an admission of liability.
• The Statute of Limitations period for the making of a clinical claim was increased from two to three years from the date of incident giving rise to the claim or the date of knowledge (if later).

It is expected that the regulations for Pre-Action Protocols will be introduced for medical negligence cases in 2017.

The Civil Liability (Amendment) Bill, when passed into law, will empower the courts, as an alternative to lump sum awards of damages, to make consensual and non-consensual periodic payment orders to compensate injured victims in cases of catastrophic injury where long-term permanent care would be required. The Bill is of considerable importance to families of catastrophically brain-injured infants whose injuries occurred as a result of a clinical negligence event.

Cost of Claims Resolved

The SCA has taken a number of measures to reduce legal fees associated with claims. These include:

• The putting in place of SCA barrister and solicitor panels to provide for competitive tendering of legal services to the SCA.
• Close examination of costs of plaintiffs’ legal representatives and seeking the maximum possible reduction through negotiation or, if necessary, by determination of a Taxing Master.
• Seeking of third party/co-defendant contributions.

These measures have resulted in a significant reduction in the average costs associated with clinical claims in 2014, 2015 and 2016 compared with the previous two years. The settlement of a number of infant catastrophic injury cases by means of Periodic Payment Orders has also been a significant factor in the fall in average costs of clinical claims in cash terms over this period – of course, in these cases, there will be on-going payments to the plaintiffs in future years.

The average cost of general claims has increased over the five-year period since 2012, notwithstanding the measures taken by the SCA to reduce legal costs. This is due to the greater number of more serious claims being settled, having regard to the ageing effect of the portfolio, particularly HSE-related claims.

Cost of Claims Resolved 2012-2016

Mass Actions

The SCA is managing a number of different mass actions against the State. Each mass action is managed by reference to a specific legal strategy to ensure that the State’s liabilities are contained at the lowest achievable level.

Active Mass Action Claims

Legal Costs Unit

A Legal Costs Unit (LCU) was established within the SCA in 2013 to deal with third-party costs arising from certain Tribunals of Inquiry (the Mahon, Moriarty, Morris and Smithwick Tribunals). In 2015, the Government extended the LCU’s responsibilities to management of all legal costs claims against the State.

The level of legal costs paid to plaintiffs’ legal representatives is carefully examined and, wherever possible and by means of negotiations, the SCA seeks to achieve the maximum possible reduction in legal costs. If the SCA cannot successfully agree the level of legal costs to be paid to plaintiffs’ legal representatives, the matter is determined by a Taxing Master.

In 2016, the SCA settled 284 bills of costs. The total amount claimed was €49.2m. These bills were settled for €27.2m – a reduction of 45% on the amount claimed. All of these claims were agreed without the necessity for taxation, thus avoiding delays in settlements and stamp duty charges at 8% of the taxed award.

Risk Management

The SCA’s risk management objective is to implement targeted personal injury and property damage risk work programmes to mitigate litigation risk in State authorities and healthcare enterprises, in order to reduce the costs of future litigation against the State. The “risk universe” indemnified by the State and managed by the SCA is extensive. For example, it includes over 200,000 State employees and all public healthcare service users (public healthcare has approximately 7 million contacts with members of the public per annum). It also includes public services that, by their nature, constitute higher risk activities such as the provision of clinical care in hospitals, Defence Forces personnel on operations overseas, members of An Garda Síochána on operational duty, customs inspections, emergency response services and custody of prisoners.

The SCA’s clinical risk management programme focuses on collaboration with risk managers and other personnel in healthcare enterprises to support patient safety. The enterprise risk management programme focuses on providing advice and support to State authorities and healthcare enterprises in relation to risk management structures, maintenance of buildings, fire safety, health and safety, and environmental management.

Legal Costs Claims Settled 2016

Figures may not total due to rounding.

Clinical Risk

Maternity services are a priority area within the clinical risk management programme. During 2016, the SCA continued its review of the three national maternity hospitals and 16 other maternity units. This review sought to compare and contrast the hospitals and maternity units from a risk management perspective.

Other significant clinical risk management activities in 2016 included:

• Engagement with the Clinical Risk Forum established in conjunction with the National Directorate of the HSE, together with regular meetings with other key stakeholders including HIQA, postgraduate training bodies, senior management and front-line hospital staff.
• Formulation and delivery of clinical risk courses at undergraduate level for the Royal College of Physicians of Ireland and Trinity College Medical School.
• An analysis of closed medico-legal cerebral palsy claims was performed during 2016. The results of this analysis will be made available, on a “lessons learnt” basis, to relevant stakeholders to enable the appropriate learning to be applied to prevent, in so far as is possible, recurrence of similar events.

Enterprise Risk

Each year, the SCA devises a risk management work programme to assist State authorities with the development and implementation of risk management policies and procedures. Significant enterprise risk management activities in 2016 included the following:

• The SCA published a major review of assaults on operational prison staff by prisoners in Ireland. The review was initiated in 2015, following a number of violent physical assaults on Irish Prison Services staff by prisoners. The review examined the incidents of assault to determine their root cause, to comment on the potential for future recurrence and to make recommendations for improvement. The SCA’s report was accepted in full by the Irish Prison Service.
• The SCA, in collaboration with the Health and Safety Authority and Critical Incident Stress Management (CISM) Network Ireland, launched a new online innovative framework for protecting the psychological health and safety of workers in occupational groups who are likely to be exposed to critical incidents as part of their work. The framework provides feedback on workplace stressors, employees’ psychological well-being and critical incident exposure in the workplace. It also provides structured guidance enabling organisations to develop an action plan to mitigate these stressors.