24 May 2019

Progress on Commonwealth's Medical Indemnity Guarantee

The Minister for Revenue and Assistant Treasurer, Senator the Hon Helen Coonan, today detailed further progress on finalising the Commonwealth's guarantee to the provisional liquidator of UMP/AMIL, Mr David Lombe.

Commonwealth officials have been working urgently with the provisional liquidator to put the legal processes underpinning the Government's guarantee in place.

"While this work is ongoing, I have provided a letter of comfort to Mr Lombe in relation to claims for past actions which have already been finalised and for which payment is required", Senator Coonan said.

"The provisional liquidator is a court appointed officer and is required to seek the approval of the Supreme Court in NSW before he is able to begin making payments pursuant to the guarantee arrangements."

The provisional liquidator, with the Commonwealth's support, went to the Court yesterday seeking approval for payments to be made. The Judge has this morning raised some issues where clarification is required before he approves the arrangements so that all unsecured creditors and members' interests are protected.

"There has been some talk in the media about doctors walking off the job," Senator Coonan said. "There is no reason for any doctor who wishes to work to stop doing so.

"The Government remains committed to the guarantee as set out in Senator Patterson's letter of 1 May 2002.

"What is being worked through is the technicalities of how claims that are currently due for payment can be paid in a timely fashion and what impact the arrangements might have on the interests of other creditors.

"All of the parties involved in this very complex issue have been working in the best interest of patients and doctors to ensure consistency of care, with minimal disruptions.

"This is a very difficult situation for all parties and is part of a broader problem of medical indemnity market.

"The situation has many similarities to the current problems in the public liability insurance market and both issues require both short and longer term solutions including the need for a shift in the attitudes of Australians over litigation and expectations for large lump sum payouts."

The matters for clarification ought to be able to be dealt with very quickly.

It should be possible for the application to the court to be determined by next Tuesday at the latest.

In the interim, the Commonwealth stands by its commitment to the guarantee.