I thank the committee for the invitation. I propose to look specifically at the network of papers released by the HSE approximately a week ago. I will not deal with the larger question of value for money and whether the State ought to make transfers. Rather, I would like to look at what would be the most positive outcome that could be obtained if the proposal, as currently put forward, were to go ahead. I will also look at whether any suggestions could be made which would deliver the outcome which everybody has been at one in seeking, namely, a modern, high-end maternity, neonatal and obstetric hospital that will deliver the services to the women, children and patients for the next 299 years, the period we have to deal with.
I will first address a question that has been the focus of considerable attention, that is, the ownership of the new maternity hospital building. I watched the discussions yesterday and the submissions on this matter. Unfortunately, I did not see all of them. One has to deal with clients as well. By the end of those discussions, there was a fairly clear position that the State is going to have a leasehold interest in the building and that the first scheduled definition of the lease sets out that any buildings erected or to be erected thereon and together with all additions alterations and improvements from time to time thereto or thereon will belong to the landlord, that is, the property which will be transferred by way of a lease - the leasehold interest. The HSE will have a leasehold interest but will never own it outright. The lease includes covenants which control the use of the property and the national maternity hospital company's constitution provides for the landlord to nominate three of its directors. This is a relationship between the leaseholder and the landlord, which is much more intimate and there is much more involvement by the landlord than one might see, for example, in a question of a ground rent or a similar situation.
The other issue I wish to address is the question of what uses the HSE can put this hospital to and how they are defined. The permitted use to which the HSE can put the new hospital is defined in the lease as follows: “In relation to the National Maternity Hospital Area [we will return to that shortly] as a public hospital primarily for the provision of all clinically appropriate and legally permissible healthcare services, including research, by a maternity, gynaecology, obstetrics and neonatal hospital, and a range of related health services in the community and any other public healthcare service or services". This creates a two-step test for any permitted use of the hospital. One should recognise that this is in the lease and therefore is a granting of a permission by the landlord to the tenant. It is a restriction, rather than an instruction. The restriction is that it can only be where the use is, first, clinically appropriate and, second, legally permissible. The first of those two tests, I will argue, is both unnecessary and problematic. It is perfectly correct to keep a legally permissible test and there is no ambiguity as to what that phrase means but unfortunately there is no definition of the phrase "clinically appropriate" within the lease to which one could turn to see what it is that was intended by the parties. There is, therefore, an ambiguity created.
On RTÉ's "Prime Time" earlier this week, Holles Street hospital's legal adviser, Ms Murphy, said she was originally very pleased at the insertion of the phrase "clinically appropriate" into the agreement document and then said, "We did not foresee that this would be taken and flipped." My argument is not for any one particular interpretation of the phrase "clinically appropriate". My argument is that there are multiple interpretations possible and it is the fact that those multiple interpretations are possible that creates the problem. This is an undefined term. Once you have an undefined or ambiguous term, it becomes a source not of constructive ambiguity as we might imagine from the political world - we are all familiar with that idea from the Good Friday Agreement - but, rather, the reason that terms in legal documents are so tightly defined is to ensure absolute clarity between all the parties. An area where there is an undefined term, the meaning of which is going to be discovered later, is an area where we can anticipate problems into the future between the parties.
Ambiguity results in unexpected, unwanted and sometimes even perverse-seeming interpretations being placed on disputed phrases. The Minister has said this phrase was introduced at the request of the HSE. It is my intention to be as constructive as possible throughout my submission and one of the things that I wish to say is that this is very good news. Were the phrase to be introduced by the counter-party, St. Vincent's Healthcare Group, it is possible there might be difficulties in removing it. If the State realised this is going to cause a problem, it could cause a difficulty once you have constructed an agreement, where the other side has asked for something to be put in, it will cause difficulties if the counter-party asked for it to be taken out. Here, however, I am proposing that the State should deal with the question of ambiguity that has inadvertently been introduced by the State's side. There should, therefore, be no difficulty in removing it without damaging the deal. I believe the State should do this. If the phrase is not removed, it should be defined by way of a list of controversial procedures which are presented as "including but not limited to", that is to say, a non-exclusive and non-exhaustive list of potential procedures. This allows for the evolution of medical technology and medical processes in the future. It does not limit those processes but, at the same time, it distinctly and explicitly addresses all those areas where there may be concerns at the moment as to whether certain services will be available immediately and, perhaps much more importantly, in the future.
To address the constitution of the new national maternity hospital company, the new company which is going to run the fresh, new national maternity hospital sets out its principal object at section 3.1 of the constitution. It states that the principal object for which the company is established is "the promotion of health, in particular by the provision of all clinically appropriate and legally permissible healthcare services, including research, by a maternity, gynaecology, obstetrics and neonatal hospital, and a range of related health services in the community." One can see that the constitution of the hospital has been drafted in such a way as to directly mirror the phraseology in the lease. This means the company’s officers are bound to perform only such activities that meet the two-step test, namely, clinically appropriate and legally permissible.
The Minister has a golden share where he can oblige directors to take action if they do not provide any and all legally permissible healthcare services.
The "golden share" clause in section 5 of the constitution does not require that they be both legally permissible and clinically appropriate. The Minister's golden share clause only requires that they be legally permissible. That is strong wording and a very valuable power to give to the Minister. It really moves the deal forward from the previous test included in the Mulvey agreement. Unfortunately, the Minister's golden share may only be exercised in compliance with the two-step test set out in the principal object. The reason for this is that it forms part of the reserved powers of the national maternity hospital's constitution. All of the reserved powers are explicitly stated to be "exclusively subsidiary and ancillary to the principal object".
To step back from all of that, which is like trying to eat a bowl of spaghetti all in one go, what we have is a series of layers of duties that are to be performed by the hospital; a series of requirements the hospital must meet in performing its principal object, its purpose; and a series of restrictions put on the hospital's usage by the lease. All of those restrictions include the test of clinical appropriateness and legal permissibility. Because the Minister's golden share is subsidiary and ancillary to the principal object, which is to say that it can only be exercised within that two-step framework, it has been placed too far down the stacked hierarchy of rights and obligations to be able to overrule a challenge to action based on any future interpretation of the phrase "clinically appropriate" in the principal object clause of the new national maternity hospital company's constitution.
I will deal with the matter of costs very briefly because, while it was the subject of discussion yesterday, I do not think it is the subject of controversy any more. The rent is set at €850,000 per year in the lease. There is a rent review every ten years. The rent is abated to €10 if the tenant follows conditions on the use of the premises. In the event the tenant does not follow the conditions placed upon the use of the premises, the abatement is lost and the rent returns to €850,000 a year. The tenant here will be the HSE and the new national maternity hospital. Those conditions include a requirement that the tenant not use the premises for any purpose that does not meet the test of clinical appropriateness. So, not only is there a principal object set out and a requirement in the permitted use clause of the lease that services must be clinically appropriate, but also built into the lease is a kind of penalty clause with regard to any activities that are not clinically appropriate, as interpreted by a future set of company directors.
I should stress again that all of this is going to go on for 299 years. That is the term of this hospital lease. There is a requirement under the lease that a hospital, whether the initial building or any future buildings that replace it, will provide services of this sort for the next 299 years. To give the committee a sense of what kind of scope that is, 299 years ago a Medici was being made a duke of Tuscany. I thank Wikipedia for its knowledge. That is a very long time ago and, given the enormous changes that have swept society just in Ireland in those 299 years, we can imagine that there will be even more sweeping changes over the next 299 years given the pace of technology. Despite this, we must consider whether there is sufficient security and certainty in these documents to ensure delivery of the services of that maternity hospital in the manner intended for that very long period. That means that the rules of the hospital, of the agreement and of the relationship between the hospital and the maternity hospital should be written down together and defined as tightly as possibly so that the agreement will not lead to ambiguity in the future.