Item 2 breaks new ground. For the first time, we are obliged to consider a contingent liability falling on the Scottish Executive. Members will have received the background paper FI/00/11/2 and the paper on which we are being asked to make a decision, FI/00/11/3. We are not being asked to comment on the policy—whether the relationship between the Scottish National Blood Transfusion Service and the Turkish company should go ahead. We are being asked to ensure that we are content that the proposal satisfies the indemnity provisions and that they are judicious. I suspect that this is not a subject on which members have a great deal of knowledge, but I invite comment.
I have a couple of general questions. What is the limit on the liability, or is it unlimited? The papers mention the different kinds of liability and draw a distinction between having a guarantee or an indemnity, which are legally enforceable, or a letter of comfort, which is not. In which category does this liability fall?
I should have said at the outset that paper F1/00/11/4—"Contingent and Actual Financial Liabilities, Guarantees, Indemnities, Letters and Statements of Comfort"—refers to the Westminster Parliament and is intended only as background; not too much should be taken from it.
Anyone chairing the board of a company would want to know the risk and would want to quantify the potential worst option to be covered. We cannot agree to unlimited backing for the project. I appreciate that this is a health issue, which are always difficult because of the ramifications of the legal systems of the different countries that the products may be used in—that is especially the case if the products are exported on from Turkey. We should have been given something more quantifiable to consider.
Given the current discussions about the liability that may exist for SNBTS products following problems with hepatitis C in the 1980s and 1990s, £5 million seems a worryingly small additional liability. Like David, I am concerned that we are being asked to agree to the Executive effectively undertaking that liability without any documentation indicating how the sum has been arrived at. More detail should be given either to this committee or to the Health and Community Care Committee about the SNBTS proposal. I know that we are not discussing the proposal itself, which is excellent, but we need to know the risks involved and how the SNBTS board arrived at the very modest liability of £5 million.
That sum is not just for the new Turkish contract but for other contracts as well.
That is right. It is not clear how that has been quantified.
Is it not £20 million?
It is £20 million overall—£15 million for the existing contract with Taiwan and an additional £5 million for the Turkish contract and in anticipation of other contracts. Given recent history in this country and in France—members of the French Government have had criminal action taken against them for failing to respond to the advice that they were given on AIDS—I am concerned that the level of liability is very modest.
I should point out that paragraph 4 of the health department minute says that the limit is "per incident". We do not know whether, if an infection in the blood involved a number of people, that limit would apply for each person or for the whole incident.
That is exactly the sort of question that must be asked.
That is what I wanted clarification of—whether "per incident" means per outbreak or per person. If it is per person, that would be £20 million each; if it means per outbreak of infection, it might not be enough.
Both Richard and Rhoda make reasonable points. I do not see any logic in the suggestion that increasing the volume of the insurance means increasing the insured amount per incident. It is the seriousness of the incident that matters; the chances of an incident occurring is irrelevant. What is suggested implies that, in the event of a case, Turkey is more likely to be litigious or to present a greater cost, rather than that an increased volume of activity would lead to a greater chance of a problem occurring.
I do not feel that I am in a position to make a judgment either. As the convener said, this breaks new ground and we can learn from it. It would have been useful to have had someone here today to answer factual questions. In future we could do that, even for 15 or 20 minutes, with the answers on the record, or we can write to the Executive, although that will mean a delay.
In a former life, I was heavily involved in the pharmaceutical industry and I looked at parallel products imported from different countries. A lot of borders were crossed and there were a lot of arguments about product liability. Looking at claims that have been made internationally in the past, I suggest that even the Barnett block is probably inadequate to deal with any contingent liability.
To give an insurance perspective, the incomplete information means that we are not in a position to know whether there is a huge commercial risk. We need the information to evaluate the risk. If we are to sign off such projects properly, we must be given a sense of the judgment underpinning what is otherwise a sensible policy suggestion; we need more detail on why the conclusions have been arrived at and on the advice given by brokers.
A number of points have been noted. We will write to ask for clarification on them and hope to have this matter on the agenda next week so that, armed with that information, we can take a decision. Do members agree that we cannot take a decision today?
Thank you.
Meeting closed at 10:17.
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