Settlement of legal proceedings by Medical Consultants in relation to a decision by the then Minister for Health in April 2009 not to pay the final phase of increases provided under the terms of the 2008 Medical Consultants’ contract was reached at the High Court today (Friday).
That decision was based upon the dramatically reduced financial resources available to the State as the fiscal crisis was unfolding and the need to utilise diminishing resources to preserve health services to the greatest extent possible.
The decision preceded the introduction of pay reductions for all public servants (including medical consultants) from 1 January 2010 under the Financial Emergency Measures in the Public Interest (No. 2) Act, 2009.
The ten cases before the High Court which were settled today were lead cases but were representative of some 700 similar cases in the system with a potential further 2,000 cases with similar grounds for initiating proceedings. Initial estimates of liability for arrears arising from the cases for the State was assessed at up to €700 million.
The estimated costs which will arise as a result of the settlement reached today are €182 million for arrears, and ongoing costs of €62 million per annum from 2019, backdated to date of settlement in June 2018. The arrears will be phased over 2019 and 2020.
The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe, TD in commenting on the outcome of the litigation said: ‘The settlement reflects the Government’s commitment to a comprehensive and vigorous defence against the claims and represents, on balance, the most cost effective and least worst outcome for the Exchequer and the taxpayer’.
“This issue has been ongoing for almost a decade and culminated in the legal proceedings, which came before the High Court in recent weeks. The State was not willingly before the High Court on this issue but like all contractual disputes the legal proceedings initiated had to be met and addressed.
“The settlement terms achieved, although extremely costly, represent a substantial reduction on early estimates of €700 million; it also reflects a considerable discount of 45+% on the potential liability ultimately identified; excludes potential Court Interest which could arise if the matter was addressed in Court; and minimises the State’s exposure to very significant legal costs for all potential claimants.
“For these reasons it has been decided, based on the legal advices of the Attorney General’s Office, to settle the cases and to address a liability that could only increase. Furthermore, it provides important certainty for the Exchequer at a time of considerable risk due to Brexit and other developments in the international environment.”
The Minister for Health, Simon Harris TD, said: ‘It’s welcome that a settlement has been reached between the State and Consultants. Significant savings for the taxpayer will be achieved given the terms of the settlement that has been brokered. It also saves all parties from a protracted and costly legal battle. I was insistent that a clause be included in the agreement to address compliance by consultants with the terms of the contract. I am a happy to say this has been achieved. The agreement confirms the commitment of the parties to compliance with contractual obligations to ensure the more timely delivery of effective care to patients. It specifically provides for co-operation in relation to arrangements put in place to verify the delivery of the consultants’ contractual commitments, in particular those relating to private practice. This is going to help in ensuring accountability, compliance with the contract by consultants and improving services to patients.’
“I understand that High Court judge, Ms Justice Úna Ní Raifeartaigh commented favourably on the fact that the parties had been able to reach a resolution in this case and I wish to take this opportunity to thank both sides for their commitment and effort in reaching this agreement.”
ENDS