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Doctors warn over insurance claims

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DOCTORS have warned about the ‘devastating impact’ a £238m. Jersey court battle might have on health service delivery across the Channel Islands and the associated consequences for business and society.

Guernsey’s BMA representative, Dr Brian Parkin, said doctors were worried that potentially the Channel Islands ‘could not afford one of these big claims’ and that insurance costs for medical professionals would be unaffordable. (Picture by Steve Sarre, 22102117)

The Jersey claim is currently being heard in the island’s Royal Court, as lawyers fight for damages for two individuals who suffered sexual, physical and emotional abuse while in their family home.

The defence has admitted the siblings should have been taken into care sooner, but disputes the level of damages.

Warnings over what has been described as a ‘ticking time-bomb’ in relation to the islands’ position regarding indemnity insurance have been on the agenda for the government of both Guernsey and Jersey since March this year.

Owing to their concerns, the Guernsey branch of the British Medical Association and the Jersey Medical Society commissioned a report from Hempsons in the UK, a specialist health and social care law firm, which said the islands needed to react now before the issue was forced upon them.

A Policy & Resources spokesman said it knew of the issue and was looking at ways to mitigate the risks.

‘The States of Guernsey is aware of this issue; it is simply the status quo and the risk is, and always has been, mitigated by insurance.

‘Central to this issue is the legal entitlement of an innocent injured party to be fully compensated for their injuries, which needs to be carefully balanced against the potential cost to the public.

‘A paper is due to be discussed by the Policy & Resources Committee within the next couple of months, where the committee will consider whether there ought to be statutory intervention via the introduction of: (i) a statutory personal injury discount rate, which can either increase or reduce the amount of a lump sum personal injury award to offset future predicted investment losses or gains, and (ii) the ability to pay personal injury awards by way of periodic payments, thus spreading the time over which awards can be paid.

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‘Should the committee believe a change is necessary, a period of consultation will follow.’

While doctors have concerns that they might be unable to practice in the island as professional indemnity insurance premiums rocket, or that insurance companies might pull out altogether, without a law change limitless claims could push up public liability premiums for businesses and even consumers’ car insurance costs could become prohibitively expensive.

The cost to the government and taxpayers could become a significant burden and ultimately it could bankrupt the islands if more claims at record levels followed.

Guernsey’s BMA representative Dr Brian Parkin said looking at the medical profession in particular, the doctors concerns were two-fold.

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‘We think that potentially the Channel Islands could not afford one of these big claims,’ he said.

‘We don’t have the resources such as somewhere like the UK.

‘The NHS puts aside a vast amount for the potential of claims and have the ability to move money between budgets and find money, but we think the sorts of [money talked] about being claimed could potentially bankrupt the island.

‘The other way it affects us is if these claims get accepted, it makes it likely that insurance of medical professionals would be unaffordable.

‘We wouldn’t have decent doctors then we wouldn’t be able to attract other professionals to the island if there was no reasonable health care.

‘It is a win-win situation that the States have to legislate.

‘These claims cannot be at the total expense of society.’

He said the amount of damages to an individual needed to be balanced between the impact on society.

The law change should be a priority, he added.

Obstetricians would be at particular risk given the high level of damages awards in birth injury cases.

The precedent for rising insurance indemnity costs was set in 2012, when Commonwealth Games cyclist Manny Helmot was awarded £14m. compensation as a result of being hit by a car in 1998. Channel Island GP indemnities doubled as a consequence and car insurance premiums rose.

The unlimited nature of claims is coupled with the fact there is currently no ability to award periodic payments in the islands.

The way lump sums are currently awarded to take into account inflation means that initial awards are significantly increased, so instead of assuming a lump sum payout would earn interest from investments, it is now assumed to fail to match inflation. The Hempsons report quotes an example case award of £8.4m, which will rise to £17.5m. as a result.

The Hempsons report said: ‘If the opportunity to reform the system is not taken, then the islands not only risk losing their health services and the populations who rely on them, but will also risk needing to find millions in damages to settle valid claims.’

Jersey’s new chief minister, Senator John Le Fondre, is said to now be looking into possible law changes in Jersey with urgency.

The head of the Primary Care Body in Jersey, Dr Nigel Minihane, wrote to the Attorney-General ahead of his appearance in court Tuesday putting forward GP and doctor concerns.

Dr Minihane said: ‘It is right and proper that those of us in our society who have been wrongly damaged deserve recompense, but not at the expense of the destruction of the community in which they live.’

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