In a decision with major implications for hospital consultants facing negligence claims which could amount to a total €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 today, 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 MDU'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 MDU 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 MDU.
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 MDU disputed the court's jurisdiction to hear that challenge. It claimed that, under an EU 2000 Regulation relating to the jurisdiction of courts in commercial matters, the Irish courts did not have jurisdiction to decide Dr Howards's claim.
In his reserved judgment yesterday in the Haasett case, Mr Justice Finnegan rejected the MDU's claim that the courts in England and Wales have exclusive jurisdiction to determine the issue of the MDU'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 MDU such as would bring the matter within the terms of the 2000 Regulation.