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  • New arrangements will see competitive tendering, fee caps applied to barristers
  • Barrister initiative builds on success of similar move with solicitor services
  • SCA given additional functions with Legal Costs Unit and Garda Compensation Scheme

The State Claims Agency (SCA), the claims management arm of the National Treasury Management Agency (NTMA), has announced a new procurement structure requiring barristers to engage in a competitive tendering process under which their fees will be capped at up to 25 per cent below current levels.

This is the first time a State agency is procuring barristers for personal injury claims in this way and follows the success of a similar initiative by the SCA last year which reduced the cost of fees paid to solicitors by 25 per cent. Under the new procurement arrangements, barristers will be required to set out their fees – subject to the respective caps specified by the SCA – for a wide range of legal services in respect of the High Court, District Court and Circuit Court. The Invitation to Tender documents will shortly be posted eTenders, the State’s public procurement website.

The State Claims Agency is the specialist unit within the NTMA tasked with managing personal injury and property damage related compensation claims against 54 State authorities.

Speaking at the review of the Agency’s activities in 2011, State Claims Agency director Ciarán Breen said the new procurement arrangements were the latest step taken by the Agency to reduce its legal costs and maximise efficiency on behalf of the taxpayer.

“The nature of our work means the State Claims Agency is one of the most significant purchasers of legal services in the country. We receive an excellent service from the barristers we engage but we now plan to use our buying power to benefit the taxpayer by achieving better value for money in respect of the fees we pay for this service,” said Mr Breen.

The new procurement structure also contains a provision that for the first time will enable barristers who have been in practice for less than five years to supply their services to the Agency. Mr Breen said this would also help foster young talent at the Bar and create greater competition by increasing the pool of barristers from which the Agency could choose.

New functions – Legal Costs Unit and Garda Compensation Scheme

The Government has decided to establish the Legal Costs Unit within the SCA to deal with third party costs arising from certain Tribunals of Enquiry. In time, it is intended that the Unit’s remit will be extended to include the assessment of legal costs concerning litigation generally against the State.

The Minister for Justice, Equality and Defence is introducing a new compensation scheme for members of An Garda Síochána maliciously injured in the course of their duty. Under the new proposals, cases will no longer go to the High Court and will instead be managed by the State Claims Agency on behalf of the Minister. Savings of €3 million per annum are expected, mainly associated with the earlier delivery of compensation and reduced legal fees and administrative costs.

Annual review 2011

Mr Breen noted a number of significant achievements by the SCA in 2011:

The Agency achieved significant savings in the management of clinical claims. While an independent actuarial assessment projected that €106 million would be required to meet the costs of the Clinical Indemnity Scheme, the actual cost in respect of this scheme was €81 million – a saving of 24 per cent. For 2012, an independent actuarial assessment estimated that €132 million will be required to meet the costs of clinical claims and the Health Service Executive’s EL/PL/PD claims portfolios. Based on the current outturn (as of mid August) the SCA expects an end-year outturn of €85 million, representing a saving of €47 million (36%) for the taxpayer.

The total cash-flow saving to the State since the SCA took over responsibility for managing EL/PL/PD claims against the Health Service Executive and 13 other State authorities on a pay-as-you-go basis is €41 million. Based on the current outstanding estimated liability associated with these claims since 1 January 2010, a long-term saving of €15.3 million is expected.

The Government significantly widened the SCA’s remit during 2011 by delegating additional responsibilities to it. These new responsibilities include managing claims against a range of additional State authorities such as FAS and the Higher Education Authority. The SCA’s remit was further expanded in 2012 with the delegation of claims alleging personal injury arising from the use of the Thalidomide and Nimesulide (Aulin) medicinal products.

The SCA had 5,306 claims under management at the end of 2011. It received 2,697 new claims and resolved 1,656 claims during the year. At the end of 2011 the Agency’s remit extended to 54 State authorities.

Commenting on the SCA’s annual review, NTMA Chief Executive John Corrigan said the State Claims Agency continued to deliver considerable savings for the taxpayer in the management of claims against State authorities during the year.

“This is a real public sector success story. The State Claims Agency has demonstrated that its approach to managing claims has delivered real benefits and cost savings to the taxpayer. I am pleased that the Government has deemed it appropriate to delegate additional responsibilities to the Agency in recognition of its ability to manage claims against State authorities in a highly efficient and professional manner,” said Mr Corrigan.

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