2 APRIL 2015
Report By: Board Chief Financial Officer (Designate)
To seek approval from the Board to submit an application to become a member of
the Clinical Negligence and Other Risks Scheme (CNORIS), “The Scheme”.
CNORIS is a risk transfer and financing scheme which was established in 1999 for
NHS organisations in Scotland. the primary objective of which is to provide a cost
effective risk pooling and claims management arrangement for those organisations
which it covers.
The scheme’s basic objectives are:
To provide advice on clinical and non-clinical scheme coverage to all parts
of the NHS in Scotland.
To support scheme Members in an advisory capacity in order to reduce
their risks.
To indemnify our Members against losses which qualify for scheme cover.
To allocate equitable contributions amongst our Members to fund their
qualifying losses.
To provide Members with scheme financial updates throughout the year to
help with financial management and planning.
To help manage risk by providing Members with clinical and non-clinical
loss analysis throughout the year.
The Scottish Government Health and Social Care Directorate (SGHSCD) fund all
large losses (those above the current scheme excess of £25,000) during each
financial year. At the end of the financial year SGHSCD collect funds from Members
to pay back the deficit accrued in-year.
In order to share the cost fairly between Members, clinical and non-clinical risk
profiles are created which determine relative risks for each organisation. The total
annual deficit is then shared between Members according to their proportion of the
overall risk.
In eliminating the need to forecast losses, or to reserve funds within the scheme,
Members contribute to losses only during the period in which they have settled,
enabling Members to retain funds for investment in frontline services for the longest
possible period.
CNORIS membership and associated cover is in place for NHS Ayrshire and Arran,
with East Ayrshire Council having appropriate insurance covers in place. These
existing arrangements will remain in place and will continue to provide the relevant
cover for the services delivered by the Council and NHS Board. The IJB CNORIS
application would specifically cover the risks associated with the IJB decision
making processes.
In summary CNORIS provides indemnity to Member organisations in relation to
Employer’s Liability, Public / Product Liability and Professional Indemnity type risks
(inter alia) no less wider than that generally available within the commercial
insurance market. The Scheme will provide “Indemnity to Principle” where required.
CNORIS also provides cover in relation to Clinical Negligence.
The Scheme provides indemnity to Member organisations in relation to their legal
liability associated with work experience recruits of whatever age acting on behalf
of the Member organisations. CNORIS will similarly provide indemnity to member
organisations in relation to their legal liability associated with students working with
the Member organisation on placement from an educational establishment.
10. CNORIS provides indemnity in relation to legal liability of Member organisations
associated with volunteers of whatever age acting directly on behalf of the Member
organisation. For the avoidance of doubt, no cover is provided in relation to
voluntary organisations.
11. The National Health Service (Clinical Negligence and Other Risks Indemnity
Scheme) (Scotland) Amendment Regulations 2015 amend the National Health
Service (Clinical Negligence and Other Risks Indemnity Scheme) (Scotland)
Regulations 2000 (“the principal Regulations”).
12. The principal Regulations establish the Clinical Negligence and Other Risks
Indemnity Scheme (“the Scheme”) which makes provision for meeting liabilities and
indemnity in respect of other financial loss by scheme members. By virtue of the
principal Regulations, all Health Boards, other statutory health bodies and the
Mental Welfare Commission must be members of the scheme.
13. These Regulations amend the provisions of the principal Regulations so that
integration joint boards and local authorities may become members of the Scheme.
14. In calculating the contribution that the Integration Joint Board will require to make
to the scheme Scottish Ministers will take into account:
their estimate of the total amount which will, by virtue of regulation 9
(payments under the Scheme), fall to be paid during that membership year
in respect of all qualifying liabilities and financial losses under the Scheme;
the nature of the member’s relevant functions;
the number of employees of the member who are engaged in its
performance of a relevant function, or any part of such a function, and the
qualifications and experience of those employees; and
their assessment of–
the effectiveness of any steps being taken, or to be taken, by the
member, with a view to reducing the incidence of qualifying liabilities
and financial losses in connection with any relevant function; and
the effectiveness of any such steps which may previously have been
taken; and may have regard to any other factor concerning that or any
other member or the Scheme which they consider to be material to
their determination.
15. Indicative costs are expected to be less than £0.005m per annum given that there
are no previous claims, and that all employees continue to be employed by either
the Health Board or the Council. This should therefore be reflected in the risk profile
of the IJB.
16. It should be noted that there is an excess of £25,000 per claim that will require to
be funded by the IJB.
17. The National Health Service (Clinical Negligence and Other Risks Indemnity
Scheme) (Scotland) Amendment Regulations 2015 amend the National Health
Service (Clinical Negligence and Other Risks Indemnity Scheme) (Scotland)
Regulations 2000 (“the principal Regulations”), and allows the Integration Joint
Board to apply to the Scottish Ministers for membership of the scheme.
18. Membership of CNORIS would provide cover in respect of any claim made against
the IJB itself in terms of Officers / Officials Indemnity, albeit the possibility of a claim
is considered low given that operational service delivery remains with the Health
Board and the Council following delegation.
19. Acceptance of the IJB to membership of CNORIS will require to be determined by
the Scottish Government. While they have committed to turning around the
application as quickly as possible, there will be a short period where no cover is in
place. The regulations do not provide for retrospective cover and there is therefore
a risk that in the intervening period, should a decision made by the IJB subsequently
lead to a loss to a third party for which the IJB is found to be negligent, then this
loss would not be covered by CNORIS and would require to be self financed.
20. It is therefore important that an application be made to join CNORIS without delay,
noting that an application cannot made until the Board is formally constituted, and
the earliest possible joining date per the legislation is 3 April 2015. An application
has been completed and will be submitted to the Scottish Government immediately
following this meeting, should the IJB agree to seek membership of the CNORIS
21. It is recommended that:
The Board agrees to seek membership of the CNORIS Scheme through
application to the Scottish Ministers;
Otherwise notes the content of the report
Craig McArthur
Board Chief Financial Officer (Designate)
23 March 2015