Legal action by consultants ‘catastrophic’ for health funding

Honouring pay claims could cost State €700m and be ‘beyond the means’

The first payment was made, but not the second phase, following the collapse in the public finances, and the State later cut consultants’ pay by 15%-25%. File photograph: Getty Images

The first payment was made, but not the second phase, following the collapse in the public finances, and the State later cut consultants’ pay by 15%-25%. File photograph: Getty Images

 

The State has warned that a successful legal action by hospital consultants over withheld pay increases could have “catastrophic consequences” for health services funding.

Consultants have challenged the withholding of agreed pay increases in 2009, and the State is contesting their claims.

The HSE had previously forecast that in a worst-case scenario, about 2,000 consultants could have to be reimbursed, at an ultimate cost of about €700 million gross.

In High Court affidavits on behalf of Minister for Finance Paschal Donohoe and others in defence of the cases, it is claimed 700 other consultants have identical claims, and that there are a further 2,280 on the same contract who may also be affected.

The cases – 10 of which are due to be taken this week – are being defended by Mr Donohoe, as both Minister for Finance and Minister for Public Expenditure and Reform, Minister for Health Simon Harris, the HSE and individual hospitals.

Paying all these claims would be “beyond the means and normal budgetary management” and would have “catastrophic consequences for service delivery”, their affidavits argue.

Adjourned

It is understood there has been significant contact between the two sides in the dispute in recent weeks and that this week’s hearing may be adjourned to allow for further talks with a view to a possible settlement.

However, any settlement is still likely to cost the State hundreds of millions of euros.

Under a contract introduced in 2008, consultants agreed to major work-practice changes, including the restriction – and in some cases, the elimination – of private practice, weekend working and extended rosters. In return, then minister for health Mary Harney offered them salaries of between €170,000 and €240,000, with increases to bring the rate up to these levels to be paid on a phased basis.

The first payment was made, but not the second phase, following the collapse in the public finances, and the State later cut consultants’ pay by 15-25 per cent.

The affidavits on behalf of the State say the “economic, fiscal and banking” circumstances at the time were of “unparalleled severity”.

‘Disturbance’

They also argue that the government of the day “made clear” in April 2009, including with the Irish Medical Organisation and the Irish Hospital Consultants Association, that some pay increases “would not be sanctioned and/or approved due to the serious disturbance in the economy and a decline in the economic circumstances of the State that had occurred”.

“In circumstances where there are approximately 700 other plaintiffs seeking identical relief to the plaintiff and a further 2,280 consultants on the 2008 contract, if the relief sought is granted the liability accruing is wholly beyond the means and normal budgetary management.

“In the circumstances it would be contrary to public policy, to the administration of justice and to principles of good administration” if claimants were allowed pursue their cases “outside the time limits provided for judicial review”.

The doctors are understood to argue they signed up to and operated the contract with the legitimate expectation its terms would be fulfilled. Other arguments understood to have been put forward by the consultants include an increase in the number of hours worked per week and how working arrangements, including in private practice, were affected.

Mr Donohoe has previously said the Government would “vigorously defend” any legal actions by consultants.

Mr Donohoe has declined to say how much the potential costs to the exchequer of settling or losing cases against a large number of consultants would be.