The HSE has been hit with an avalanche of High Court claims from hospital consultants who have declared war over pay and contracts which could cost the taxpayer €350m.
More than 150 separate summonses have been served by consultants on the State's public health agency and hospitals. The consultants claim the HSE reneged on contracts agreed in 2008 and are seeking millions of euro in unpaid salary rises they allege were promised.
Proceedings have also been taken against a number of the country's voluntary hospitals, according to a confidential HSE memo seen by the Sunday Independent.
A High Court claim for breach of contract is launched by way of Plenary Summons and separate summonses have also been served on the Minister for Health. Hundreds more are expected to be lodged in the weeks ahead.
The HSE is facing a backdated pay bill of at least €350m if the claims are successful. The taxpayer may also have to fork out millions more to compensate consultants for unpaid overtime stretching back seven years, plus potentially enormous legal costs.
Under the 2008 agreement, doctors working at that time were due to receive pay rises - bringing their then salaries up to between €175,000 and €240,000 - for taking up extra hours and weekend work in the public sector.
The HSE is believed to have saved €50m a year since 2008 by not implementing the contract in full. The Executive denies any breach of contract and will defend the actions.
It has appointed Arthur Cox solicitors to manage the enormous case load and has barred health service employers from instructing separate legal firms in a bid to streamline costs.
The confidential legal memo sent to HSE management warns: "Given the sheer number of Plaintiffs, it is essential that this litigation is managed as cost effectively as possible. Under no circumstances should any organisation instruct solicitors to act on their behalf in this litigation. Arthur Cox will act for all employer defendants."
The wave of claims follows a recent High Court ruling in favour of a hospital consultant who took an Employment Appeals Tribunal case against the HSE under the Payment of Wages Act over unpaid salary hikes.
The HSE appealed to the High Court to have the retrospective pay claims of Dr John McDermott, a consultant endocrinologist at James Connolly Hospital in Dublin, statute barred. However, a ruling in that case gave leave to hundreds of other consultants to begin suing the HSE for breach of contract dating back to 2008.
Under a contract signed with the HSE in September 2008, Dr McDermott would have been entitled to a salary of €190,000, but in return he had to agree to work extra hours, report to a clinical director, and reduce his private practice to no more than 20pc of his clinical workload.
Dr McDermott carried out the new obligations, and should have been entitled to have his contract backdated to July 2008.
But the HSE only implemented the first half of the pay rise on January 1, 2009, with no retrospective pay, and never implemented the second tranche due in June 2009, it was claimed.
The HSE has defended its failure to pay the full terms of the contract arguing that it could not do so without the approval of the then Health Minister Mary Harney. She refused to sanction the full payments as the country was in the throes of financial crisis.
The HSE has argued that it cannot abide by the financial terms of the contract without ministerial sanction.
The Irish Medical Organisation said: "The IMO is supporting a number of consultants and have instructed our lawyers to initiate proceedings against the Ministers for Health and Finance and the HSE for breach of contract." The Irish Hospital Consultants Association declined to comment.
Meanwhile, the HSE also faces the threat of legal action from the board of St Vincent's Healthcare Group, which runs two of Dublin's main hospitals St Vincent's and St Michael's. The group has pledged a "legal battle" with the HSE if more than 100 of its consultants are prevented from carrying out private work.
Over recent months the group has clashed with the HSE over executive pay, governance and consultants' private practice rights. The group says 106 category B consultants are threatening legal proceedings if any change is made to their terms of work, as demanded by the HSE.
Since 2008, new hospital consultants have been appointed under either a Category A contract, which allows them to work only in public hospitals, or on a Category B contract, which permits limited private practice in public hospitals.
But the St Vincent's Healthcare Group insist its legal advice is that, as its private hospital is co-located with the public facility and operated by the same employer, its category B consultants can work in both institutions on its campus.