In Defence Of Discretionary Cover – The DDU and MDDUS
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- Published: Wednesday, 18 May 2022 08:00
- Written by Chris Tapper
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Representatives from two of the UK’s leading dental indemnity companies have strongly defended their organisation’s utilisation of discretionary indemnity.
“There’s an awful lot of misinformation about the abuse of discretionary indemnity,” said Dr Stephen Henderson, on Friday.
The Head of the Dental Division at the Medical and Dental Defence Union of Scotland went on “I’ve been in the business 22 years – I can’t think of a claim that’s been turned down where the member was in benefits, so I don’t know where this story comes from.”
Dr Henderson said the misinformation “Is peddled by insurance (companies) as essentially, a marketing device.”
Dr John Makin, Head of the Dental Defence Union, told an audience at the Dentistry Show “In terms of discretion, we’re very proud of the way we’ve looked after our members for 100 years.”
Dr Makin continued “We’re perhaps unique on this platform in terms of having offered both insurance and discretionary and indeed at the same time, to the same members. And there were some occasions when discretion came to the rescue when the insurance policy didn’t pick something up.”
“So I can state with absolute certainty, the confidence that I have in the discretionary model and that it’s our exercise act in our members best interests.”
Dr Makin added “I’m a dentist of 30 years standing, and I would not work for an organisation that I didn’t think was acting in my colleagues interests.”
Dr Henderson and Dr Makin were participating in a panel discussion between representatives of dental indemnity and insurance companies organised and hosted by the British Association of Private Dentistry (BAPD).
Chairing the debate, Dr Simon Thackeray, one of the founder members of the BAPD had asked the panel “Do you think that there is still a future for a discretionary based model in indemnity, given the criticisms that the Government made over the Paterson case?”
In 2020, an independent inquiry found that breast surgeon Ian Paterson had subjected more than 1,000 patients to unnecessary and damaging operations in both NHS and private hospitals over 14 years, before he was stopped. The case resulted in implications for the professional medical indemnity sector.
BLM Law, an insurance risk and commercial law firm said of the inquiry’s recommendations in an article in 2020, “Paterson was a member of the MDU who provided him with discretionary indemnity. That cover was then withdrawn as the liability to injured patients stemmed from his criminal activities.”
BLM Law went on “In the light of the clear potential for patients injured as a result of the negligent or criminal actions of medical professionals to go uncompensated the Inquiry recommended that the Government should, as a matter of urgency reform the regulation of indemnity products for healthcare professionals and introduce a nationwide safety net.”
Dr Makin said “Even people on this panel who’ve written about the Paterson case, will acknowledge that that was a criminal activity, and there’s a moral hazard in insuring against criminal activity, as a matter of public policy.’
“So I don’t think there’s an insurance policy on the planet that would necessarily cover for a case that warranted 20 years in prison for actual bodily harm.”
But Kevin Culliney, Founding Partner of Densura questioned the financial stability of the traditional indemnity organisations in dealing with liabilities created by litigation.
Mr Culliney said “By and large the defence bodies have done a good job.”
“One of the issues I think is staring us in the face is the financial security of the MDU.”
“Our regulator, the Financial Conduct Authority make sure that we as brokers are doing what we should do and they make sure that the underwriters have the asset base and that they have the financial stability to pay claims.”
Mr Culliney told the audience “In the case of the MDU, we have this elephant in the room of the problem of GP indemnity, where GP’s went into a Government scheme three years ago.”
“The outstanding liabilities to the MDU are undisclosed but MDDUS and MPS (Medical Protection Society) both settled their liabilities with the Government. They settled those liabilities for about 750 million.”
“MDU at the stage that they went into the scheme had about half the GP population - so we don’t know what the MDU’s liabilities are, but one can take a guess at 750 million.”
“They’ve got an asset base of 400 odd million. That’s just for the GP’s with no extra income coming in. It’s about financial stability, they need to be regulated.”
Mr Culliney concluded “They (the MDU) need to make sure that they’re there to pay claims in the future. That’s the problem.”
But the DDU head, Dr Makin replied “That’s just wrong in financial terms. The last time I looked we had a billion pounds worth of assets. We were fully funded.”
Dr Makin continued “We are incredibly successful in defending our GDP members against claims. I can’t remember the exact figure but something like 80% of cases are successfully defended.”
Qualified dentist and practising solicitor, Neil Taylor, is Head of Taylor Defence Services.
Mr Taylor argued “What are we doing with all of these past losses that might not be covered?”
That is why I’ve spent the last 12 years putting together past cover on a contingency basis if the others cannot pick up their claims, our policy will be triggered. That is absolutely crucial.”
And whilst the others along the line (the panel) might want to discuss assets, whether it’s 400 million or whether it’s 1 billion, the issue is that for a dental profession, there are two major factors in play just now.”
One is discretionary indemnity. My view on that is that should be outlawed. You should move to an all insurance base, and I think that the Government’s going to support that very shortly.
Secondly, what do you do once you’ve done that with all of these past liabilities that are going to be kicking about and that’s why it’s so important to me to get over the one message, which is, if you are joining an insurance based model, that you make sure that there’s contingent cover to pick up what isn’t there.
“So hypothetically, let’s say all of the DDU members went to the BDA - will the BDA pick up the DDU’s cases from the past?”
Also participating in the panel was Dr Len d’Cruz, Head of BDA Indemnity and Gary Monaghan, Co-Founder of dental indemnity company, PDI.
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