TIDMSPI
RNS Number : 6525Q
Spire Healthcare Group PLC
13 September 2017
ISP Settlement statement
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Spire Healthcare Group plc
("Spire Healthcare", "the Company" or "the Group")
Spire Healthcare, together with other respondents, reaches
settlement with patients of Ian Paterson
13 September 2017
Spire Healthcare announces that it, along with the other
defendants, has today reached agreement in principle to settle all
current and known claims against Spire Healthcare relating to the
actions of the disgraced former consultant, Ian Paterson, with the
establishment of the Ian Paterson (Liability to Private Patients)
Compensation Fund (the "Fund").
The Fund will provide compensation to approximately 750 patients
currently bringing claims against Spire Healthcare and will provide
a mechanism for dealing with any new claims brought before 30
October, 2018.
The Fund will be managed by the lead solicitors for the
claimants. It will be funded by Spire Healthcare and its
co-defendants (or, in the case of Ian Paterson, his insurers)
contributing a total of GBP37m to the Fund. Spire Healthcare's
contribution will be GBP27.2m including a contribution to
settlement costs.
The agreement is conditional upon the parties agreeing, and the
Court approving, the terms of a formal Court Order which is
expected to be considered by the High Court in October.
Once approved by the Court, the Order will conclude all current
and known claims from patients against Spire Healthcare and its
co-defendants, Ian Paterson and Heart of England NHS Foundation
Trust. The Order will also provide for a portion of the Fund to be
set aside to provide compensation for any former patient of Mr
Paterson who has not yet brought a legitimate claim against Spire
Healthcare and the other defendants but does so prior to 30 October
2018.
What Ian Paterson did, in both his NHS Trust and in the private
sector, was unprecedented in terms of scale and impact. Spire
Healthcare is determined to learn the lessons from these events to
ensure they can never happen again. In 2013, Spire Healthcare
commissioned an independent report by Verita and has fully
implemented the recommendations of that report, significantly
strengthening its clinical governance processes.
Changes since the report include the introduction of a new
"ward-to-board" governance process across Spire Healthcare, the
establishment of a Board committee to oversee clinical governance
and safety, enhanced monitoring of consultant activity, the review
of all cancer patients by a Multi-Disciplinary Team of clinicians,
strengthened whistleblowing processes and improved communication
and collaboration with the NHS.
Exceptional pre-taxation charge to the income statement for the
6 months ended 30 June 2017
Spire Healthcare's contribution to the settlement of GBP27.2m
will be paid out of cash reserves. Spire Healthcare's primary layer
of insurance, with RSA, has been materially exhausted, funding
Spire Healthcare's defence costs to date, as well as claimants'
damages and costs in a limited number of claims settled prior to
this provisional agreement being reached. A further GBP10m of
insurance may be available from RSA, depending on whether or not
the various claims against Spire Healthcare fall to be aggregated
and treated as one claim under the terms of the RSA policy (which
Spire Healthcare disputes). There is ongoing litigation between
Spire Healthcare and RSA in this regard.
Spire Healthcare's secondary layer insurer (which provided
additional cover of up to GBP10m for any one claim and GBP20m in
the annual aggregate) has indicated that it is disputing coverage.
Spire Healthcare is currently reviewing its options but intends to
use all legal means to pursue recovery. Meaningful progress is not
expected to be made until the legal position on the primary layer
is resolved.
For accounting purposes, the settlement of the Paterson claims
constitutes an adjusting post balance sheet event for the reported
results for the 6 months ended 30 June 2017. In determining the
exceptional charge to the income statement, management have had
regard to the likelihood of insurance recoveries pertaining to
large claims. Management has determined that the recovery of
disputed insurance amounts would not meet the very high accounting
threshold for recognition of such assets at this time.
As a consequence, an exceptional pre-taxation charge of GBP27.6m
will be reported in the results for the 6 months ended 30 June
2017, reflecting Spire Healthcare's contribution to the settlement
and certain costs in achieving the settlement. It is expected that
this charge will result in a comparable cost outflow in the 12
months ended 31 December 2017. This settlement does not have a
material impact on available funding or financial covenants
associated with existing indebtedness.
Simon Gordon, Interim Chief Executive Officer, said:
"Earlier this year a criminal court decided that Ian Paterson
must bear responsibility for his actions, finding him guilty of
assaulting a number of his patients. He behaved with clear criminal
intent and abused the trust of those who looked to him for his care
and relied upon his expertise. However, whilst nothing diminishes
Mr Paterson's responsibility for his actions, these events took
place in our hospitals, and this should not have happened. We
accept that better clinical governance in the private hospitals
where Mr Paterson practised, as well as in his NHS Trust, might
have led to action being taken sooner, and it is right that we have
made a material contribution to the settlement announced today.
"We have apologised unreservedly to Mr Paterson's patients for
their suffering and distress and we would like to repeat that
apology. As soon as the criminal trial ended we were able to start
liaising with claimants' lawyers to broker a settlement involving
all defendants. This has resulted in the agreement announced
today."
Ends
Please note that Spire Healthcare reports interim results for
the six months ended 30 June 2017 on 14 September, 2017.
For further information please contact:
Spire Healthcare
Antony Mannion, Director, Strategy and Investor Relations
+44 (0)20 7427 9160
Maitland
Neil Bennett / Tom Eckersley
+44 (0)20 7379 5151
Registered office and head office:
Spire Healthcare Group plc
3 Dorset Rise
London
EC4Y 8EN
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCLLFFLADIVLID
(END) Dow Jones Newswires
September 13, 2017 07:30 ET (11:30 GMT)
Spire Healthcare (LSE:SPI)
Historical Stock Chart
From Apr 2024 to May 2024
Spire Healthcare (LSE:SPI)
Historical Stock Chart
From May 2023 to May 2024