Legal claims against State double in five years to €5bn

The State’s liability for outstanding legal claims has reached €5 billion for the first time, almost double the overall bill compared with five years ago.

In a briefing note to an Oireachtas committee, the State Claims Agency (SCA) has disclosed that at the end of 2022 the total estimated outstanding liability was €4.957 billion.

The chairman of the Public Accounts Committee, Brian Stanley, said he was very concerned at the sharp increase in the State’s liabilities for injury and negligence claims.

“Over the past two years another €1 billion has been added to the bill,” said Mr Stanley, a Sinn Féin TD. “There is a need for more diligence, for the SCA to work with other bodies, especially the HSE, to ensure the risk is minimised.”

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The SCA is part of the National Treasury Management Agency and handles all negligence claims taken against the State.

In a background note to the Public Accounts Committee this month, SCA director Ciaran Breen disclosed that there were 11,204 active claims against the State at present. The outstanding liabilities are overwhelmingly medical negligence cases – comprising €3.86 billion of the almost €5 billion total.

The comparable figure at the end of 2017 for all State claims was €2.7 billion.

The substantial increases has been attributed to more medical cases taken as well as discernible increases in settlements. This is particularly evident in settlements in cerebral palsy cases which have risen substantially in recent years.

Economist Prof John FitzGerald said another factor was the practice of awarding lump sum payments. He said such calculations of future costs were subject to large margins of error. A claimant could end up not getting adequate compensation or, conversely, the State may significantly overpay.

He also instanced higher interest rates and their impact on large awards.

“Trying to do it in lump sums is difficult. The interest rate has gone up. The bond rate is at 3.5 per cent and the investment return on the money is increased. So at the present time, a lower lump sum is more appropriate.”

A significant factor in the sharp increase in medical negligence liabilities is the cost of funding continuing care into the future for those injured at birth or in childhood, the costs of which have increased substantially in recent years due to inflation and cost-of-living hikes.

While there has been a concerted effort to resolve cases by mediation in recent years, leading to a reduction in legal fees, the legal costs still amounted to €166 million in 2022, which amounts to about one-eighth of the profession’s overall income.

In the note, Mr Breen states that 1,795 of the claims, about one-sixth, relate to mass actions. A total of 575 of these relate to lack of in-cell sanitation claims, so called “slopping-out” claims, taken by current and former prisoners against the Irish Prison Service.

The SCA estimates the outstanding liability for the mass actions at €515 million, about 10 per cent of the overall liability. Other mass actions include Lariam, mother and baby homes, H1N1 flu vaccination, and thalidomide.

The final payout for so-called slop-out cases is expected to be modest in the context of the overall liability to State claims.

Last year, the PAC heard that the final cost is expected to be about €15 million, half the original estimate of €30 million.

The mass action was triggered by a 2019 Supreme Court ruling that forcing prisoners to use a bucket as a toilet and empty it every morning was a breach of their constitutional rights.

In succeeding years more than 2,700 claims were made by former, and existing, prisoners. Slopping out has been discontinued in most Irish prisons with the exception of Limerick Prison and Portlaoise Prison. More than 2,100 of those claims have now been settled.

In his note, Mr Breen said the SCA strongly favours mediation, where possible, as an alternative to the formal court process. He said a third of clinical claims in 2022 were dealt with using mediation.

In late 2019, the PAC responded to the sharp escalation in claims arising from clinical negligence and said there was no functioning systems-wide approach in the Health Service Executive to incorporate learning from associated incidents across the entire health sector.

“The failure to incorporate learning is itself likely to contribute to the increase of such claims,” it stated.

The committee recommended a formal system to incorporate lessons learned from incidents of clinical negligence across the health sector in order to reduce the number of such incidents in the future.

A cross-departmental group, Patient Safety Together, has been set up since then to share information arising from patients’ safety incidents, complaints’ data, and other published national and international safety alerts and research.

Mr Stanley said that where people had a genuine case, they were entitled to the awards, especially if there were care issues that would recur throughout their lifetime. But he said the State’s focus should be on learning from mistakes so that the chances of recurrence was lowered.

He said there were cases arising from gardaí and prison officers being injured while on duty that could be avoided with better equipment and by increasing the minimum number of gardaí who respond to public order incidents.