In a decision with major implications for hospital consultants facing negligence claims, which could amount to a total of €400 million, the High Court has ruled it has jurisdiction to decide whether the UK-based Medical Defence Union is entitled to refuse indemnity cover to Irish consultants.
The judgment of the President of the High Court, Mr Justice Joseph Finnegan, in a test case yesterday, was given in the context of a two-year-old dispute between Irish hospital consultants and the MDU over who should provide cover in medical negligence cases predating the Department of Health's new medical insurance scheme of February 2004.
The issue relating to the union's liability for indemnity cover arose in an action brought on behalf of Nicole Hassett, now aged eight, suing by her mother Orla, of Cashel Road, Clonmel, Co Tipperary, against the South Eastern Health Board.
Nicole, who has cerebral palsy and is severely disabled, alleged negligence in the circumstances of her birth at St Joseph's Maternity Hospital, Clonmel, in November 1997. In a settlement approved last June, Nicole was awarded €3.75 million and costs.
The board had claimed an indemnity or contribution from Dr Raymond Howard, a consultant engaged by the board, in the action. Dr Howard, a member of the MDU for 32 years, consequently joined the union to the proceedings, claiming an indemnity or contribution from it. He claimed he had paid a subscription of some €87,000 to the MDU in the year 2000 alone and that other claims against him had been satisfied by the union.
The MDU agreed to provide some assistance to Dr Howard in the case but refused to provide an indemnity in relation to any award against him. Dr Howard challenged that refusal in the High Court but the union disputed the court's jurisdiction to hear that challenge. It claimed that under a 2000 European Union regulation relating to the jurisdiction of courts in commercial matters, the Irish courts did not have jurisdiction to decide Dr Howards's claim.
A similar jursidicitonal point was made by the MDU in another case relating to a €4.1 million award made in January 2004 to another child with cerebral palsy, Cheryl Doherty, now 12, of Clonmany, Buncrana, Co Donegal, arising from the circumstances of her birth a Letterkenny General Hospital in 1993. In that case, the North Western Health Board sought indemnity in relation to the award from Dr Brian Davidson, a consultant, who in turn sought indemnity from the MDU. The High Court's decison on jurisdiction also applies in that case.
In his reserved judgment yesterday in the Hassett case, Mr Justice Finnegan rejected the MDU's claim that the courts in England and Wales have exclusive jurisdcition to determine the issue of the union's entitlement to refuse indemnity to Dr Howard.
He found Dr Howard's claim was based on a collateral contract and was not based on the validity in terms of company law or any decision by the union such as would bring the matter within the terms of the 2000 Regulation.
The background to the MDU's refusal of an indemnity was a dispute between it and the Minister for Health and Children arising from the union's concern about the size and frequency of negligence claims against its members in Ireland, especially obstetric claims relating to the number of babies born with cerebral palsy and the expense of caring for severely neurologically damaged babies for the rest of their lives.
