The Ownership Challenge of The New National Maternity Hospital
- May 9th, 2017
- Jason O'Sullivan
The ownership of the new National Maternity Hospital (NMH) remains contentious since it was first announced that the Sisters of Charity would be gifted ownership of the NMH after its transfer from Holles Street to the St Vincent’s Hospital campus (which is owned by the religious order). Such a proposal has given rise to widespread public outrage and concern regarding the potential influence of the Church over the country’s National Maternity Hospital should this arrangement go ahead.
In the intervening period, the Minister for Health Simon Harris has done his best to calm public hysteria and counteract the negative rhetoric purveying the story. The latest development has been the Dáil’s backing of the Sinn Fein motion on Wednesday (3rd May) which calls for immediacy of action in respect to the hospital’s construction and for the provision of legal guarantees on its independence from all non-medical influence in clinical operations.
Minister Harris wisely withdrew the Government’s counter motion during the debate and instead insisted there was “creative space” to examine the ownership issue. He has also sought more time to engage with pertinent stakeholders over the coming weeks and to consider the legal mechanisms necessary to “absolutely protect the State’s investment including ownership“. It will remain to be seen what legal instruments will be utilised by the Government to ensure such protection but many have been mooted in recent weeks.
The latest suggestion from Minister Harris is a possible long-term lease, which was also previously mentioned by his Cabinet colleague Charlie Flanagan, Minister for Foreign Affairs during a recent RTE interview. The option of a long-term lease will be based firmly on what tenancy agreement is devised between the State and the Sisters of Charity and how commercially prudent it is for the tax payer. A long-term lease such as this could conceivably be for up to 999 years at a peppercorn (nominal) rent or be a lease with a view to acquiring freehold in the future. At present it appears to be the most favoured and viable option. However, it will untimely be up to the potential landlords to convey how willing they are to enter such an agreement with State.
Another legal option for the State to consider would be a compulsory purchase order (CPO) in the acquirement of the lands upon which the new hospital will be built. The CPO process involves the taking of and without consent, lands by state bodies for public infrastructure projects such as road improvements which are deemed to be in the common good. CPO’s are inherently complex and contentious in their own right, where objections and delays are frequent and expected. Although the CPO option will be examined by the Government in this instance, it will be unlikely such drastic measures would be adopted. Talk of CPO’s could also raise unwelcome questions about the governance of other voluntary hospitals, many of which are privately owned but entirely State-funded.
The option of a “lien” has also been suggested by Minister Harris in recent interviews to protect the State’s future investment and was also contained within the 25-page report by former chairman of the Workplace Relations Commission Kieran Mulvey who acted as mediator on the terms of agreement between the National Maternity Hospital, Holles Street and St Vincent’s Hospital Group.
A lien can be an effective tool in such relationships as it acts as a type of charge upon real or personal property for the satisfaction of a debt and is essentially a security interest put in place to protect a creditor. In this instance however, it would be questionable whether a lien would make commercial sense given the real benefactors would be the Sisters of Charity rather than the State as the lien would be presumably secured on the lands the hospital is built. The very fact the hospital is being built on these lands would increase the market value extraordinarily to the benefit of the religious order.
Corporate law issues also prevail from the agreement which was reached last November between the Sisters of Charity, the sole shareholders of St Vincent’s Healthcare Group and the board of the NMH. The ownership issue as alluded to above present’s challenges not only from a ‘Property Title’ perspective but also raises legitimate fears about the possibility of undue influence by the Sisters of Charity on the hospitals clinical and operational independence. Despite assurances that the hospital’s autonomy will be safeguarded through “reserved powers” that only the Minister for Health can amend as well as holding a “golden share” for added protection, uncertainty prevails.
The perceived protections have actual limits, for although these “reserved powers” cannot be easily removed as they are merely powers rather than legal obligations. Such “reserved powers” could be influenced in theory through the Board of Directors, which will be comprised of nine Directors, four nominated by the St Vincent’s Hospital Group and another four nominated by the National Maternity Hospital Chartered Trust, leaving one vacancy to be filled by an independent international expert in Obstetrics and Gynaecology as appointed by a Selection Committee (as yet undetermined). This leaves the real possibility that such an expert could have a casting vote on important Board decisions which could severely alter the extent these “reserved powers” are exercised.
Another obvious legal concern is the ultimate control which could be enjoyed by the Sisters of Charity in their ability as sole shareholders to use such legal status with the purpose of changing the corporate structure of the NMH and deviate from the initial agreement and specific safeguards as contained therein.
The NMH saga is likely to run for some time, and continue to be lampooned with accusations of mistrust and concern however legitimate or unwarranted. It will therefore take an impressive charm offensive by Government and in particular Minister Harris to restore some sense of decorum and stability to these proceedings. The ownership challenge is one that will need to be resolved post haste and despite what legal mechanism is eventually favoured, trust will need to be restored so as to ensure that we do not lose sight of the grand prize – a new National Maternity Hospital for Irish citizens.
Jason O’ Sullivan, is a Solicitor and Public Affairs Consultant at J.O.S Solicitors
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