THE GOVERNMENT is close to a potential multimillion euro deal with a medical indemnity company over who should pay for the cost of claims made against doctors who were previously covered by the organisation.
Negotiations to settle the protracted litigation between the State and the UK-based Medical Defence Union (MDU) are at an advanced stage. Highly placed sources said firm proposals were on the table to resolve the row.
If a deal is reached it could generate many millions of euro for the State which has been paying the cost of claims since the MDU declined to provide cover for Irish consultants several years ago.
Money generated as part any deal with the organisation could be used to partly offset the unanticipated cost of providing lump sum payments and pensions to health service staff who retired over recent months.
For decades the State paid or subsidised the premium payments made by doctors in Ireland to the MDU, one of two UK-based private companies which provided medical indemnity cover to the medical profession in this country.
However, the organisation is not an insurance company but a mutual organisation and the payment of claims against members is discretionary.
The row dates back to the introduction of a clinical indemnity scheme by the government nearly a decade ago.
The scheme, which is operated by the State Claims Agency, manages clinical negligence claims against public hospitals and doctors.
At the time of its introduction, the then government decided it would have no retrospective effect.
The scheme came into effect for hospital consultants from February 2004.
The MDU contended the State should take over the historic liabilities of its members in respect of claims that occurred prior to the introduction of the scheme which the indemnity body argued deprived it of vital income to meet its historic liabilities in Ireland.
When no agreement was reached on this issue with the government, the organisation subsequently began to refuse cover to its existing and former consultant members in Ireland.
In late 2004 the Department of Health introduced an arrangement whereby consultants who were refused indemnity by the MDU would have their cases handled to completion by solicitors nominated by their representative body.
At the end of proceedings, application could be made to the minister for ex-gratia assistance in relation to the payment of the settlement/award of damages and associated legal costs.
The MDU yesterday declined to comment on the issue.
