The establishment of a new agency to settle insurance claims against the State is awaiting Cabinet approval.
The central claims agency is likely to be used to settle any Government liability on past child abuse scandals as well as stress and environmental claims against various departments or the defence forces.
The Tanaiste, Ms Harney, told the Dail in March that the proposals would be dealt with at the first Cabinet meeting after Easter. However, it is now understood that this has been delayed for procedural reasons. It is understood that a memo has already been sent to Government and that that contained official backing from the Department of Finance. The hope is that the new agency will result in substantial savings for the Exchequer. The belief is that too many claims now find their way to court because of a reluctance by some civil servants to decide on a settlement. This can prove expensive.
The agency, which will be run under the auspices of the National Treasury Management Agency, will take on all the claims of accidental personal injury and property damage made against the State, the Attorney General, Government departments, community and comprehensive schools as well as residential centres for young offenders.
It had the backing of the former attorney general, Mr Dermot Gleeson, and is also supported by the incumbent, Mr David Byrne.
At present each department settles its own claims and this can prove unwieldy as well as very lucrative for the legal profession. Past experiences with hepatitis as well as Army deafness have underlined the importance of using a single agency to handle, process and decide claims, sources say. The agency is likely to have a high degree of discretion, although some of the large class action suits will still need Government decisions.
According to sources, the idea of the agency is to bring private sector experience and expertise to the area. The Finnish debt agency already runs a similar service, while Australia and the US also use a single agency to settle Federal claims.
In its initial stages the agency will not cover local authorities or health boards.
The agency will also ultimately develop into a so-called captive insurer. That will mean it will decide the risk profile of each department and charge them the appropriate amount for insurance. It will cover some of these risks itself and some will be passed on to re-insurers.
At the moment there is no record of the claims profile of the different departments and this will need to be built up over a number of years before it can be properly run as a captive insurer.
Other plans for the NTMA to run a central treasury management service are also due to come before Cabinet. Under this proposal local authorities, health boards and VECs will be obliged to ask the NTMA to quote for managing their cash balances.
The NTMA believes it will be able to offer this service more cheaply than most commercial banks. The local authorities would not be obliged to take on the service but they would be obliged to get the NTMA to quote for it.
