A decision by the HSE in 2008 to outsource testing to multinational laboratories is the "foundation stone" for the current cervical screening crisis, the Supreme Court has been told.

Lawyers for Limerick woman Ruth Morrissey said the decision resulted in just 10% of cervical smear tests being carried out in Ireland.

Senior Counsel Patrick Treacy was addressing the five judge Supreme Court on the second day of an appeal by the HSE and two laboratories against a High Court decision to award Ms Morrissey and her husband €2.1m in damages.

Mr Treacy said the fruits of that decision were "becoming manifest now" and Ruth Morrissey was a perfect example of it.

He said there was concern among Irish pathologists at the time about the decision leading to some resignations from a quality assurance committee.

Once Quest diagnostics was contracted to carry out tests during a back log, all but one of the Irish laboratories were "mothballed", he said.

Mr Treacy said with 90% of tests carried out by multinationals and 10% being done domestically, it would be expected that 10% of cervical check claims would be coming from the Irish labs.

In fact he said this was not the case and while no exact figures were available the proportion of claims arising out of tests from the Irish lab was "tiny".

He said because of this, the Supreme Court's decision was extremely important as it would provide an honest scrutiny of the standards in an Irish lab and those applied in a multinational.

On the issue of liability he said the HSE had a statutory obligation to provide the screening service.

Having made the decision to outsource 90% of testing to multinational companies the HSE was now telling the Supreme Court it was not responsible, he said.

He pointed to an indemnity clause in the HSE's contract with the laboratories adding "if you dont have primary liability why it a clause in a contract entitling you to full indemnity?"

Mr Treacy also said inaccuracies were being "floated around" that Mr Justice Kevin Cross in his High Court judgement had created a second test when he said screeners must have "absolute confidence" before passing a test as negative.

Mr Treacy said he had done "no such thing", no new test had been set by the judgment and there had been no change in the legal standard.

He said the term absolute confidence had been used in the wider context of a discussion about the standard of care and the High Court judgement was clear on that.

He said the judgement had said the standard of care was the test known as the Dunne test.

What Mr Justice Cross has done was taken an established legal standard and applied it to a practical reality involving a cytoscreener.

He said all the experts agreed that if there was any doubt in the mind of a screener they should not pass it as clear.

He pointed to evidence from an expert in Ms Morrissey's High Court case who said if there was "any doubt about the normality of the cells the cytoscreener passes it on to the pathologist and there is no tolerance for any doubt."

He disagreed with counsel for the HSE that other areas of medical care could be affected by the judgement.

Earlier counsel for Medlab Pathology Limited Eoin McCullough, expressed sympathy to Ms Morrissey for "the very difficult position in which she finds herself".

This was acknowledged by Mr Treacy who said his comments reflected the sentiments of all the lawyers representing all parties in the case.

The Chief Justice Mr Justice Frank Clarke said from the courts point of view they appreciated these were important legal issues which may seem somewhat dry in the context of Ruth Morrissey's problems but the court had a job to do.

Mr Treacy said his client had been completely indemnified now by the State, leaving the parties free to argue those legal points before court.

Mr McCullough said the High Court found Medlab was negligent in failing to have the 2012 properly tested for adequacy.

He said there was a failure of High Court to determine as a primary question the number of cells on the slide and to conclude it was adequate. The court should have concluded it was adequate, he argued.

He said it was wrong of Mr Justice Cross not to start with the issue of how many cells were on the slide, to work out what was there to be seen.

He also argued the High Court was wrong to conclude adequacy can be determined by reference only to a particular test and that a slide with more than 5,000 cells is adequate irrespective of how it was tested.

He also argued against the reasoning behind a portion of the award of damages by the High Court and said the court had failed to give any reason why it was €50,000 more that what is generally acknowledged to be a cap of €450,000 in cases of catastrophic injury.

Ruth Morrissey was diagnosed with cervical cancer in 2014.

She was not told until May 2018 that a review carried out in 2014, showed smears taken under the CervicalCheck screening programme in 2009 and 2012 had been reported incorrectly.

Her cancer returned early last year and she now faces a terminal diagnosis.

She and her husband were awarded €2.1m in damages by the High Court.

The Supreme Court was told the Government had confirmed to the Morrisseys that they would retain the damages irrespective of the outcome of the Supreme Court appeal.

Lawyers for the HSE and two laboratories say they're appealing the case to the Supreme Court get legal clarity.

They say a finding by the High Court that individual screeners must have absolute confidence before passing a test as negative has far reaching consequences.

The Supreme Court has been told the judgment could affect cancer screening services and medical diagnosis generally as well as for the CervicalCheck tribunal and other litigation relating to cervical cancer.