JOINT COMMITTEE ON HEALTH & CHILDREN- THURSDAY 22 JANUARY 2015 OPENING REMARKS, SIMON KAYLL, CEO, MEDICAL PROTECTION SOCIETY

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1 THE CHALLENGES FACING THE MEDICAL PROFESSION ARISING OUT OF THE HIGH COST OF PROFESSIONAL MEDICAL INDEMNITY INSURANCE AND HOW THESE CHALLENGES ARE BEING MET JOINT COMMITTEE ON HEALTH & CHILDREN- THURSDAY 22 JANUARY 2015 OPENING REMARKS, SIMON KAYLL, CEO, MEDICAL PROTECTION SOCIETY 1. On behalf f the Medical Prtectin Sciety, I wish t begin by frmally thanking all members f the cmmittee fr kindly inviting me t present t yu tday. 2. These are unquestinably challenging times and MPS understands that the increases in its subscriptin rates, caused by the rise in the cst f clinical negligence, are painful and are having a significant impact n the prfessin. 3. As a respnsible, nt-fr-prfit rganisatin wned by members, we have an bligatin t ensure that we cllect sufficient subscriptin incme t meet the expected future csts f claims against members s we can be in a psitin t defend their interests lng int the future. 4. MPS cnsiders itself part f the medical and dental cmmunity and is cmmitted t ding all it can t wrk with the gvernment and thers t intrduce trt and prcedural refrm t begin t tackle this serius prblem. 5. MPS is the wrld s leading prtectin rganisatin fr dctrs, dentists and healthcare prfessinals. We prtect and supprt the prfessinal interests f mre than 290,000 members arund the wrld and mre than 16,000 in Ireland. Our benefits include access t indemnity and expert advice. MPS has had members in Ireland fr ver 100 years. 6. Our philsphy is t supprt safe practice in medicine and dentistry by helping t avert prblems in the first place. 7. The vast majrity f MPS members in Ireland have ccurrence-based prtectin althugh MPS recently intrduced claims-made prtectin. All the benefits f membership f MPS are discretinary as set ut in the Memrandum and Articles f Assciatin. 8. MPS ccurrence-based prtectin depends n the date n which an adverse incident ccurs, and nt the date that the matter is reprted t MPS. If the practitiner is a member at the time an adverse incident ccurs, they can ask fr assistance with the mediclegal cnsequences at any time; even if it is years later, r they are n lnger a member, r have ceased practising. 9. MPS claims-made prtectin, depends n bth the date n which an adverse incident ccurs and the date that the matter is reprted t MPS. One MPS is nt an insurance cmpany. All the benefits f membership f MPS are discretinary as set ut in the Memrandum and Articles f Assciatin mps.rg.uk

2 year s subscriptin prvides the member with prtectin frm claims and cmplaints arising frm adverse incidents in that year s practice prvided that: They remain in cntinuus membership between the date f the incident and the date they reprt it t us; r Having left claims-made prtectin they reprt the adverse incident within the time allwed by any extended reprting benefits that they have purchased. THE DETERIORATION IN THE CLAIMS EXPERIENCE 10. There has been a deteriratin in the claims envirnment fr a number f years, and significantly s in the past tw years. This is a result f a large increase in bth the rate at which private cnsultants are being sued and the average size f thse claims. As a cnsequence, we had t increase ur subscriptin rates. In 2014, when cnsidering the claims envirnment fr private hspital cnsultants, the actuarial estimates f the cst f indemnity fr claims per member had increased by ver 95% between 2009 and 2014 In the same perid fr Irish GPs the increase in the actuarial estimates f the cst f indemnity fr claims per member was 52% Fr Irish dentists the increase in the actuarial estimates f the cst f indemnity fr claims per member was 62%. 11. The impact f the deterirating claims envirnment is felt differently by MPS than the State Claims Agency. This is because MPS has t fund itself n a prspective r pre-funded basis cllecting mney nw fr incidents which ccur this year but fr which claims may nt arise fr many years in the future. The State Claims Agency wrks n a pay as yu g basis, requiring funds this year, nly fr the csts paid ut this year. MPS is nt an insurance cmpany. All the benefits f membership f MPS are discretinary as set ut in the Memrandum and Articles f Assciatin mps.rg.uk

3 12. Over the past year we have lbbied the gvernment n the need fr change and made it clear that the cst f clinical negligence is t high when cmpared t ther equivalent cuntries. We have argued fr lng term refrm f the legal system, t address the rt causes fr the high cst f clinical negligence, and fr shrt term relief fr members, such as reducing the indemnity cap fr cnsultant claims. 13. We believe that this deteriratin (increase in severity and frequency f claims) cmes as a result f many factrs but des nt reflect a decline in prfessinal standards. Whilst we cannt prvide an exhaustive list, we believe, based n ur experience, that cntributing factrs may include: The ecnmic dwnturn with plaintiffs pursuing cases they may nt cnsider when the ecnmy is mre buyant and ptentially pushing sme plaintiff lawyers int clinical negligence wrk as mre cmmercially rientated wrk has dried up A grwing cmpensatin culture in Ireland An increase in patient expectatins. 14. These prblems are further cmpunded by: The lack f an efficient and predictable legal prcess n judge-led case management r pre-actin prtcl Lack f a speedy and transparent system leading t pressure t settle claims in circumstances where we wuld nt d s elsewhere in the wrld Limited pprtunities fr defendants t make cst prtective ffers r incentives fr plaintiffs t settle early The cst f settling a claim increasing as time ges n Plaintiff csts being exceptinally high. Tw examples f recent cases include: A case settled fr 300,000 where we have recently received a bill f csts f 440,000 (including senir and junir barrister s fees f ver 90,000). In anther case MPS admitted liability within 6 weeks f ntificatin f the claim. The plaintiff s slicitrs wuld nt engage in early settlement negtiatins and issued prceedings. The case was finally settled fr 625,000. The plaintiff s slicitrs submitted a bill f csts were 150,000, cmpared with ttal defence csts f 24, Fllwing a review f the US and Australian experience f similar deteriratins in the claims envirnment and their respnses t this, we have put frward a number f significant recmmendatins which we believe culd begin t tackle these cncerns. 16. Whilst the deteriratin in the claims experience against private hspital cnsultant members we have seen ver the last tw years may nt cntinue at such a pace, the experience t date merits deep cnsideratin f trt and prcedural refrm. MPS is nt an insurance cmpany. All the benefits f membership f MPS are discretinary as set ut in the Memrandum and Articles f Assciatin mps.rg.uk

4 PROCEDURAL REFORM 17. Urgent intrductin f a pre-actin prtcl we have written t plaintiff lawyers with large medical negligence practices t request that they wrk with us t pilt this. 18. MPS acknwledges and warmly supprts the cnsiderable wrk that has been dne by the Wrking Grup n Medical Negligence and Peridic Payments, which was established in 2010 by the then President f the High Curt, Mr Justice Quirke and subsequently chaired by Ms Justice Mary Irvine. We understand that the Wrking Grup recmmended a pre-actin prtcl fr medical negligence claims Hwever, there is still n pre-actin prtcl included in the civil prcedure rules. A pre-actin prtcl encurages penness and transparency, and prvides the pprtunity t investigate a claim and reslve it prir t issuing prceedings. 20. Creatin f a specialised High Curt list cmprising clinical negligence actins presided ver by a High Curt Judge. This wuld allw pr-active case management t ensure that cases are prgressed as efficiently as pssible. TORT REFORM 21. GENERAL DAMAGES MPS recmmends that a tariff f general damages is created in statute t achieve greater predictability and reduce the chances f ver-settlement. This tariff wuld prvide a range f damages fr an extensive list f specific injuries MPS recmmends a limit n general damages which we hpe wuld cntribute t a reductin in the number f claims, the value f awards and indemnity csts. 22. SPECIAL DAMAGES MPS recmmends a limit n future earnings and that future financial lsses are limited t prven earnings t lwer csts in the system and intrduce greater parity in the size f awards plaintiffs receive MPS recmmends a limit n future care csts t ensure that they accurately reflect the true cst f care in Ireland. 23. FREQUENCY OF CLAIMS MPS recmmends a Certificate f Merit be intrduced which requires a cmmitment frm the slicitr that the case has merit, and is supprted by independent expert pinin t affirm that he r she believes there has been a breach in the duty f care and that this breach caused the injury MPS recmmends a cap n lawyers fees in smaller value cases t intrduce prprtinality t cut legal csts and ptentially reduce the number f small value, unmeritrius cases. 1 Reprt n the Wrking Grup n Medical Negligence and Peridic Payments March 2012 MPS is nt an insurance cmpany. All the benefits f membership f MPS are discretinary as set ut in the Memrandum and Articles f Assciatin mps.rg.uk

5 24. DEFINITION OF CLINICAL NEGLIGENCE MPS recmmends that gvernment intrduces a law that defines the trt f clinical negligence and cnfirms that a trt is established by bth breach f duty and that breach must have caused the injury. It wuld als assert that the burden f prf is placed n the plaintiff. A legal definitin, where this is expressly acknwledged, will ensure that defendants culd be cnfident they wuld receive a fair trial and clarify fr plaintiffs what factrs they need evidence f befre making a claim. 25. LENGTH OF LIMITATION PERIODS MPS recmmends full implementatin f the recmmendatins f the 2011 Law Refrm Cmmissin review n limitatin which has the ultimate aim f ensuring claims are brught as quickly as pssible MPS recmmends an ultimate limitatin perid f ten years t prvide certainty and fairness and limit the adverse effects n the cst f prfessinal prtectin. 26. Thank yu fr yur time and yur attentin this mrning, this cncludes my pening statement and I wuld be happy t take any questins. MPS is nt an insurance cmpany. All the benefits f membership f MPS are discretinary as set ut in the Memrandum and Articles f Assciatin mps.rg.uk