12. Estimated liabilities of Delegated State Authorities
State Claims Agency
During 2015, 2,943 (2014: 3,003) new claims were received and 1,863 (2014: 1,939) were resolved. At 31 December 2015, the SCA had a total of 8,275 (2014: 7,221) claims under management.
At 31 December 2015 the estimated liability of Delegated State Authorities in respect of claims under management by the SCA was €1.79bn (2014: €1.47bn), of which €1.35bn (2014: €1.16bn) was attributable to Clinical Claims and €436m (2014: €309m) to General Claims. The estimated liability is calculated by reference to the ultimate cost of resolving each claim including all foreseeable costs such as settlement amounts, plaintiff legal costs and defence costs.
The estimated liability calculation is based on actuarial assumptions including a real rate of return of 3%. However, a High Court ruling, on 18 December 2014, ruled that a real rate of return of 1% should apply to certain Court Awards. This decision was appealed by the SCA to the Court of Appeal. On 5 November 2015 the Court of Appeal delivered its judgment effectively upholding the High Court judgment, ruling that in cases involving catastrophic injuries, claims for the cost of future care are to be calculated at a real rate of return of 1% and claims for future pecuniary loss are to be calculated at a real rate of return of 1.5%. The SCA has appealed this judgment to the Supreme Court and therefore has not adjusted its method of calculation of estimated liability, pending the outcome of the appeal. If the Supreme Court upholds the decision of the Court of Appeal, the increase in the estimated liability of Delegated State Authorities in respect of claims under management at 31 December 2015 by the SCA would be circa €300m.