Lab involved in CervicalCheck scandal paid €10m in settlements and legal costs last year

A private lab firm facing multiple legal proceedings arising from the CervicalCheck programme scandal last year paid out €10 million in settlements and legal costs connected to legal cases from the scandal.

That is according to new accounts filed by the Dublin-based Medlab Pathology Ltd, which has been sued in the High Court by a number of women concerning alleged failings in the firm’s participation in the HSE’s CervicalCheck programme from 2011 to 2019.

In the third set of annual accounts to be filed by the firm in recent weeks, they disclose that the company paid out €10 million in gross payments in the 12 months to the end of June 2022 arising from a number of High Court actions.

The accounts disclose that the firm received medical malpractice insurance of €4.84 million towards the pay-outs resulting in Medlab Pathology making a net payout of €5.16 million last year.

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Arising from Medlab Pathology’s €10 million gross payout in 2022 and €2.56 million in 2021, the firm has a remaining gross €36.7 million provision at the end of June 2022 to deal with outstanding CervicalCheck cases before the court.

[ CervicalCheck case: ‘Her blood is on the Government’s hands’ - Teap family settle as labs admit breach of duty ]

[ Lab involved in CervicalCheck scandal estimates liabilities from legal claims at €49m ]

At the outset of the cases coming before the High Court, the company set aside a gross provision in its recently filed 2020 accounts of €49.6 million to deal with the cost of damages and legal costs from the CervicalCheck cases.

The 2020 accounts showed that the firm had insurance receivable of €31.48 million, leaving the company facing a net-payout of €18.15 million.

The new 2022 accounts state the outstanding gross provision of €36.7 million at the end of June 2022 includes an estimate for future claims, based on data access requests received.

The note states that “in relation to the small number of claims for which the insurers have not yet confirmed indemnity, we used our best judgement of the liability, based on the most reliable information available”.

The directors state that the company no longer trades and the main business of the company is to manage the liabilities arising from litigation, in respect of claims related to the cervical cancer screening programme in Ireland.

The €10 million payout has been provided for in prior year accounts with the gross €49.6 million provision in place for the CervicalCheck cases and the firm recorded a loss of €303,370 last year.

At the end of June last, the firm had accumulated losses of €26.2 million.

Addressing the company’s going concern status where it has an equity deficit of €9.95 million, a note attached to the accounts states that the company’s sole liabilities relate to legal claims arising in respect of the cervical cancer screening programme in Ireland.

They state that insurance is in place in respect of these liabilities and the net liability for the company is largely the insurance deductible.

The note adds that “these cases are inherently complex, and the determination of the ultimate outcome requires significant judgment, with the final resolution likely to be beyond the going concern outlook”.

The note states that “a number of cases have been settled subsequent to the balance sheet date, with others discontinued and the remainder active”.

In recent Dail replies to Deputy Catherine Murphy (Social Democrat), Minister for Health, Stephen Donnelly TD (FF) stated that the State Claims Agency (SCA) has received 385 claims concerning CervicalCheck including 79 psychological injury claims from members of the families of the women concerned.

He said: “In relation to the 385 claims received 183 are active and not yet concluded and 202 have concluded.”

Minister Donnelly said that at the end of June 2023 damages amounting to €710,000 had been paid by the SCA in respect of CervicalCheck claims.

He said “It should be noted that most of the claims have been settled by the laboratories involved in the individual claims”.