Address by Micheál Martin at Seminar on “Medical Indemnity in the 21st Century”

At the outset I would like to congratulate Hayes and Sons on organising this seminar and to thank them for inviting me to formally open the event. That the topic is of interest and concern is borne out by the large attendance here this afternoon.

The Problem

The title chosen for today’s event suggests that the increasing cost of medical indemnity and malpractice insurance is the core problem which we have to contend with. I believe that while cost is always a concern, in this case it is a few steps removed from the fundamental underlying problem. In the end indemnity or insurance is simply a funding mechanism by which we all, either as health professionals or taxpayers, pay for financial compensation to patients who suffer injuries in our hospitals. I believe that we need to examine the issue from that perspective if it is to be properly addressed.

The underlying problem which medical indemnity ultimately attempts to deal with is that patients suffer injuries in the course of their treatment by our health services. Some injury or trauma is unavoidable in the provision of acute care. Many patients will inevitably have to deal with outcomes which are less than satisfactory. However these are not the injuries or outcomes with which we are really concerned. The vast majority of these adverse events or outcomes are an unavoidable and inevitable consequence of either the disease process or an unavoidable side effect of the treatment performed. The events which result in the claims which have to be funded by indemnity or insurance are the negligent events which cause avoidable injuries to patients or the provision of a standard of care which falls below what is considered to be generally acceptable.

What is the extent of this problem? The truth is that we don’t really know. For all sorts of reasons the data which would allow us to determine the extent of avoidable injury are not available. The main reason for this lack of information is that it is simply not collected at all. Much of the data that are collected are held by insurers and the mutual defence bodies for the purpose of handling and settling claims. Many of you here today will be familiar with studies undertaken in other jurisdictions which suggest that the number of negligent adverse events and the overall rate of error in the provision of medical care are both unacceptably high. Studies conducted in the United States suggest that up to 4% of hospitalised patients suffer an adverse event. About half of these events are believed to be avoidable. There is no reason whatever to believe that these findings cannot be validly applied to the Irish healthcare system. To that extent I believe that we are faced with a serious challenge to tackle it. We have a moral and ethical obligation to do so.

The Present Solution

It is from the pool of negligent adverse events that claims for compensation emerge. Again studies in the United States suggest that only about 1 in 8 negligent events result in a claim for compensation. At present a patient who has suffered what they believe to be an adverse event takes an action for personal injury through the civil courts system. If they can establish negligence on the part of the staff or hospital which treated them then they will receive compensation for the injury sustained. In that process they take their place with all other litigants who are pursuing claims for personal injury. The courts do not distinguish between claims arising from negligent medical practice and other similar claims. This does create some problems for both plaintiffs and defendants in medical malpractice cases. The vast majority of plaintiffs in personal injury cases were fit and healthy before the event which resulted in the injury. By definition patients presenting to the health service have their health compromised by the disease or injury which results in their seeking care. Many of the therapies administered to them can result in additional strain on already weakened bodies. The natural progression of disease can obscure the real cause of the patient’s current condition. Ultimately the test which has to be applied to the claim is whether other doctors accept that what the defendant did in the circumstances was reasonable. There is no objective standard of care to be applied in these cases. If the case comes to court a judge must decide on the merits of conflicting professional evidence and issue a finding. I can understand how many doctors and other health professionals believe that this system is not best suited to deal with malpractice claims. I also understand why lawyers will say that that standard of proof required by the tort system is a fair test of whether care was negligent or not.

Do We Have A Malpractice Crisis?

If the system for dealing with claims arising from alleged negligent medical care has remained largely unchanged for decades why should we have begun to think in the 1990s that we were suffering a medical malpractice “crisis”? I have already remarked on the shortage of published data in the field so it is impossible to quantify the extent of the “crisis”, if indeed there is a “crisis” at all. However there does seem to be a consensus among those involved in this area and observers that there has been a substantial increase in the number of claims against hospitals and doctors. There also seems to be agreement that the size of awards in those cases has also increased. It is further claimed that the legal and other transactional costs associated with handling claims have increased. The health service is not unique in experiencing these developments. There seems to be widespread agreement that Ireland is a litigious society and is becoming more so. There appear to be several reasons for this trend. The population is more highly educated and more aware of their legal rights and entitlements than before. The introduction of contingency fees by the legal profession has made the remedy of litigation more widely available. There appears to have been a shift in the duty of care expected of employers, public bodies and others who offer services to the public. The growth in litigation has pushed up the cost of public and employers liability insurance. In 1999 IBEC estimated that the cost of insurance against personal injury claims could account for up to 3% of GNP. Between 1995 and 1997 the cost of public and employer’s liability insurance increased by 20%.

The health service has not been insulated from the trends and has experienced the same cost pressures as the wider business world. In 2000 the cost of providing medical indemnity cover to doctors and dentists was in the region of £33m. In 1991 it was about a third of that amount. Within the overall increase in cost there has been a spectacular increase in the cost of securing indemnity cover for Obstetrics. The Medical Defence Union now charges over £68,000 per annum to provide cover for its Obstetrician members in Ireland. Nobody believes this to be true cost as Obstetrics is subsidised, in part, by the subscriptions charged to other doctors. This cost is directly linked to the scale of awards made in respect of infants who suffer brain damage during delivery.

What Is To Be Done?

If this is a crisis what are we doing about it? Most of you are probably aware of the fact that the Government decided in late 1999 to tackle two elements of the problem. Firstly it decided that the existing fragmentary insurance and indemnity arrangements for hospitals and doctors should be rationalised. In future health agencies will accept vicarious liability for the actions of their doctors in the same way that they already do for other staff such as nurses, physiotherapists etc. This approach has been termed “enterprise liability”. I will not go into the detail of this as it will be dealt with later by another speaker. However I think it is a sensible approach which should speed up the settlement of claims by consolidating the insurance and indemnity arrangements on the defence side. The second step was to look at the possibility of introducing a “no fault” or “needs based” compensation scheme for infants who suffer cerebral damage at, or close to, the time of birth. I do not intend to go into detail on this issue either as we are privileged to have Mr John Hoff to follow me this afternoon.

Prevention Better Than Cure

To some degree the steps which we have taken can be criticised on the grounds that they do not go for enough. “Re-engineering” how we pay for indemnity or removing the need for the parents of a brain-damaged infant to sue their doctor do not, in themselves, tackle the underlying problem of medical error which I mentioned at the outset. However taking that view is to ignore the potential benefits which the new arrangements offer. A consequence of the present arrangements is that we have very little risk management activity in our services. The different insurance arrangements and their associated incident reporting requirements have mitigated against the introduction of comprehensive clinical risk management programmes. As a result hospitals and doctors are largely unaware of the nature and extent of the clinical risks which they face every day. Consequently they are hindered in taking effective action to reduce or eliminate the risks. By eliminating the different reporting requirements and establishing a single system for reporting and analysing adverse incidents we can begin the process of dealing with those risks. I believe that this has the potential to make a major contribution to patient safety which will be consistent with the commitment to enhancing the quality of healthcare which itself will be a major theme of a new health strategy to be unveiled later this year.

Patients As Partners

It has to be admitted that we will be embarking on this effort at a difficult time. Confidence in our health services and in the medical profession has been shaken by a number of highly publicised events in Ireland and in neighbouring countries. Here we have had the Hepatitis C problem, the treatment of haemophiliacs, the organ retention and disposal controversy and a number of other high profile failures in the expected standard of care. In the U.K. we have observed the fall-out from the Harold Shipman case and the events unveiled at Bristol Children’s Hospital. As Professor Liam Donaldson observed in his recent lecture in Dublin, these events have a disproportionate impact on public attitudes to the health service and the medical profession. A huge effort is needed to win back the trust and confidence of patients and their relatives. One of the common threads which runs through many of these events is a disregard for the views and feelings of those who use our services. This in itself is probably a manifestation of the paternalism which has historically characterised the delivery of health care. A well-educated and informed population is no longer prepared to accept that the doctor necessarily “knows best”. I have little doubt that much litigation arises from a failure to take proper account of patients’ views or a failure to secure proper informed consent. I was interested to see that, in an analysis on the ten most costly allegations made against hospitals insured by St Paul Health Care in the United States, informed consent ranked as number 1 in 1999. This occurred despite the fact that it had not appeared in the top ten allegations for the previous year. This highlights the need to improve communications with patients at all stages of their treatment. If I have to make a plea today it is that we begin to treat patients as partners in the process of care. This also imposes a duty on patients to begin to take responsibility for important aspects of the care process for themselves.


I see today’s seminar as an important event in opening up a debate on how we can ensure that we provide patients with a safe and acceptable level of care. If we fail to meet that standard we must be prepared to meet the cost of providing fair compensation in a reasonable time. How we do that and how we pay for it are the topics for discussion today. I hope that today will only be a starting point in our attempt to resolve these issues. Once again I would like to thank Hayes and Sons for taking the initiative in organising this event and congratulate them on attracting such a large attendance.

The Road To Enterprise Liability