• Spire agrees £27.2m settlement in case affecting more than 750 patients
  • Company initially denied responsibility, saying it did not directly employ rogue surgeon
  • Firm representing victim says ambiguity remains over cover for private patients

A private hospital group has agreed to pay £27.2m in compensation to patients injured by a surgeon who operated from its sites.

Spire Healthcare this afternoon said it would settle all the current claims brought against it relating to surgeon Ian Paterson.

The company said this covered 750 patients and “will provide a mechanism for dealing with any new claims brought before 30 October 2018”.

A further £9.8m will be contributed by Mr Paterson’s insurers and Heart of England Foundation Trust, where he also operated.

Spire said its share would be paid out of cash reserves, subject to agreement with the parties and following a High Court order, expected next month.

Mr Paterson carried out unregulated procedures on patients and practised for nearly a decade after colleagues raised concerns about him in 2002.

As late as April 2017, Spire had argued it did not employ Mr Paterson directly and was not accountable.

In a document released to investors, the company said: “What Ian Paterson did was unprecedented in terms of scale and impact. Spire Healthcare is determined to learn the lessons from these events to ensure they can never happen again. In 2013, Spire Healthcare commissioned an independent report by Verita and has fully implemented the recommendations of that report, significantly strengthening its clinical governance processes.

“Changes since the report include the introduction of a new ‘ward to board’ governance process across Spire Healthcare, the establishment of a board committee to oversee clinical governance and safety, enhanced monitoring of consultant activity, the review of all cancer patients by a multidisciplinary team of clinicians, strengthened whistleblowing processes and improved communication and collaboration with the NHS.”

The statement said Spire was in a legal dispute with its primary insurer RSA over a further £10m of coverage, dependent on whether some claims were aggregated under RSA policy.

It said it was also in dispute with the provider of its second layer of insurance, which denies liability, though progress is not expected on this until the dispute with RSA is resolved, the company said.

Spire had a turnover of nearly £1bn in 2016 and floated as a publicly listed company in 2014.

The company has been led by executive chair Garry Watts since last June when chief executive Rob Roger stepped down. Mr Watts went off sick in June this year with finance director Simon Gordon acting as interim.

Mr Gordon said: “Earlier this year a criminal court decided that Ian Paterson must bear responsibility for his actions, finding him guilty of assaulting a number of his patients. He behaved with clear criminal intent and abused the trust of those who looked to him for his care and relied upon his expertise.

“However, whilst nothing diminishes Mr Paterson’s responsibility for his actions, these events took place in our hospitals, and this should not have happened. We accept that better clinical governance in the private hospitals where Mr Paterson practised, as well as in his NHS trust, might have led to action being taken sooner, and it is right that we have made a material contribution to the settlement announced today.

“We have apologised unreservedly to Mr Paterson’s patients for their suffering and distress and we would like to repeat that apology. As soon as the criminal trial ended we were able to start liaising with claimants’ lawyers to broker a settlement involving all defendants. This has resulted in the agreement announced today.”

But a lawyer representing victims said there were still unanswered questions about how protected private patients were.

Sallie Booth of Irwin Mitchell said: ”While Spire in this case has set aside a significant sum, it is likely to be less than the amount that the patients affected need. There are also other medical negligence victims who have found that indemnity insurance does not cover their private doctor when things have gone wrong. This is still a grey area and many people wrongly believe they will be better protected under private care than under the NHS.

”The issue of exactly how much responsibility private hospitals have for the misdeeds of medical practitioners who use their facilities is not yet determined and we are pleased, therefore, on behalf of our clients that Spire has today accepted that ‘better’ clinical governance might have led to ‘action being taken sooner’. But that is little comfort for Mr Paterson’s victims.”