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Prepared by Stephen Milgate
for and on behalf of the
Australian Doctors' Fund and the Council of Procedural Specialists
PO Box 12, Arncliffe NSW 2205
Telephone: 02 9567-7329 Facsimile: 02 9567-4681
Email: cops@milgate.net
17 July 2002
Council Of Procedural Specialists
These proposals have been prepared as a response to the increasing concern over litigation and rising insurance costs across the Australian community.
Acknowledgement
This research would not have been possible without the financial support of the Australian Doctors' Fund, founded in 1989, by Dr Bruce Shepherd AM.
It is now recognised by senior members of the Australian Judiciary that the laws concerning negligence require reform.
"The deficiencies of the law of negligence have now become very apparent. It favours generosity to the plaintiff at the expense (in many cases) of justice to the defendant. It deters those who provide goods and services to the public from taking risks which might be perfectly reasonable to take."
"Some judges seem to strive to find a reason for finding in favour of a plaintiff, particularly if the injuries are serious, so that he or she may receive compensation. In the result, damages are sometimes awarded in cases in which a reasonable and informed person would not have thought that the defendant was at fault."1
Sir Harry Gibbs, Chief Justice of Australia (1981-1987)
"We have allowed the tests for negligence to degenerate to such a trivial level that people can be successfully sued for ordinary human activity."
"When I say 'we', I mean all levels of adjudication, right up to the High Court."2
The Honourable Justice James Thomas, Judge of the QLD Court of Appeal (1998-2002)
"In many respects the law of negligence is the last outpost of the welfare state. Notwithstanding that the system is based on a finding of fault, the practical operation of the law of negligence suggests that an element of welfare state paternalism, driven by compassion, may well exist. Furthermore, on some occasions there may have been inadequate weight given to the principle that an individual should take responsibility for his or her own actions."3
The Honourable JJ Spigelman, Chief Justice of NSW (1998 - )
"Medical practitioners tend to see malpractice cases as involving a moral blight or stigma upon the practitioner concerned. From the point of view of the patient (and most lawyers) however, the issue is usually more basic. It is whether a person who has suffered in some way as a result of medical or hospital procedures will be cast upon the genteel poverty of the social security system or be entitled to recover compensatory damages from the medical practitioner's insurance. To gain insurance, the practitioner must pay premiums. These premiums become part of the costs of medical practice. In this way, all patients bear the cost of, and contribute to, the fund from which are paid damages when things go wrong."4
The Honourable Justice Michael Kirby, Judge of the Australian High Court (1996 - ).
An eminent body of judicial opinion is on the public record concerning the need to reform the laws of negligence in Australia ie tort law reform.
A British legal case in 1856 established that:
"Negligence is about causing damage to another because of a failure to exercise reasonable care; it is doing something that a reasonable person in the class of persons to which the defendant belongs would not do, or not doing something that a reasonable person in that class would do."5 [underline added]
Two legal concepts arise from the legal definition of negligence, namely, reasonable care and the actions of a reasonable person (the man on the Clapham omnibus).
The modern form of negligence dates from Donoghue v Stevenson6 where in a 3-2 split decision the House of Lords ruled that a manufacturer, Stevenson, owed a duty of care to the ultimate consumer of a bottle of ginger beer, Donoghue
In this case Lord Atkin established the principle which forms the modern test for determining the existence of a duty of care.
"You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law, is my neighbour? The answer seems to be - persons who are so closely and directly affected by my acts that I would reasonably [sic] to have them in contemplations as being so affected when I am directing my mind to the acts or omissions which are called in question."7
By 1932 the law had established the concept of a duty of care towards one's neighbours.
"Today, for a plaintiff to succeed in an action in negligence, he or she must establish (on the balance of probabilities):
The standard of proof required to succeed in negligence is one of balance of probabilities as opposed to criminal law, which is beyond reasonable doubt.
The obvious difficulty in determining whether or not a professional (ie a person holding themselves out to have special skill and competence) has been negligent is the difficulty in both:
In the case of determining the standard of care, judgements have often relied on the reasoning of J. McNair in Bolam v Friern Hospital Management Committee [1957] WLR 582.
"I must tell you what in law we mean by "negligence". In the ordinary case which does not involve any special skill, negligence in law means a failure to do some act which a reasonable man in the circumstances would do, or the doing of some act which a reasonable man in the circumstances would not do; and if that failure or the doing of that act results in injury, then there is a cause of action. How do you test whether this act or failure is negligent? In an ordinary case it is generally said you judge it by the action of the man in the street. He is the ordinary man. In one case it has been said you judge it by the conduct of the man on the top of a Clapham omnibus. He is the ordinary man. But where you get a situation which involves the use of some special skill or competence, then the test as to whether there has been negligence or not is not the test of the man on the top of a Clapham omnibus, because he has not got this special skill. The test is the standard of the ordinary skilled man exercising and professing to have that special skill. A man need not posses the highest expert skill; it is well established that it is sufficient if he exercises the ordinary skill of an ordinary competent man exercising that particular art. I do not think that I quarrel much with any of the submissions in law which have been put before you by counsel. Mr Fox-Andrews put it in this way, that in the case of a medical man, negligence means failure to act in accordance with the standards of reasonably competent medical men at the time. That is a perfectly accurate statement, as long as it is remembered that there may be one or more perfectly proper standards; and if he conforms with one of those proper standards, then he is not negligent. At the same time, that does not mean that a medical man can obstinately and pig-headedly carry on with some old technique if it has been proved to be contrary to what is really substantially the whole of informed medical opinion. Otherwise you might get men today saying: "I do not believe in anaesthetics"; "I do not believe in antiseptics"; "I am going to continue to do my surgery in the way it was done in the eighteenth century". That clearly would be wrong.
Before I get to the details of the case, it is right to say this, that it is not essential for you to decide which of two practices is the better practice, as long as you accept that what the defendants did was in accordance with a practice accepted by responsible persons; if the result of the evidence is that you are satisfied that his practice is better that the practice spoken of on the other side, then it is really a stronger case. Finally, bear this in mind, that you are now considering whether it was negligent for certain action to be taken in August, 1954, not in February, 1957; and in one of the well-known cases on this topic it has been said you must not look with 1957 spectacles at what happened in 1954."9 [underline added]
Hence, J McNair established what is known as the Bolam test as a determinant of professional medical negligence, although the principles themselves are not restricted to medical negligence cases.
The test was further explained by Lord Scarman in 1985 when he stated:
"The Bolam principle may be formulated as a rule that a doctor is not negligent if he acts in accordance with a practice accepted at the time as proper by a responsible body of medical opinion even though other doctors adopt a different practice. In short, the law imposes the duty of care: but the standard of care is a matter of medical judgement." 10 [underline added]
The Bolam principle has been used to determine the required standard of care in medical practice, namely, did the defendant act in accordance with a responsible body of medical opinion.
Despite a movement by Australian courts away from the Bolam principle in favour of the test of reasonable care. FvR (1983) 33 SASR 189; Rogers v Whitaker (1992) 175 CLR 479; 109 ALR 625. Bolam's reasoning has not been abandoned:
A 1997 British case, Bolitho v City and Hackney Health Authority11, is said to have modified or updated the Bolam principle in the terms of expert evidence.
Further, there has been a reference to Bolam in the context of non-medical cases such as Heydon v NRMA Limited [2000] NSWCA 374 and shows that the Bolam principle has application not only to medical negligence but to professional negligence.
In 1999, in a Singaporean case, Gunapathy Muniandy v Dr James Khoo & 2 others (Suit No. 1768 of 1999), the full bench of the Singaporean High Court sitting as an Appeals Court overturned a decision of Justice GP Selvam who had found in favour of the Plaintiff, Madam Gunapathy Muniandy.
It is reported in his last decision before retiring, Justice GP Selvam, a judge in the Singapore Supreme Court, wrote a 354 page judgement which was the result of his personal research into the treatment of Mrs Muniandy by Dr James Khoo and two others. The patient had a brain tumour and was treated with neurosurgery and subsequently radio therapy.
Judge Selvam, who is reported as having "always been keenly interested in science and medicine" involved himself extensively in the research of neuroscience and neurosurgery. His judgement included "extensive explanations and colour diagrams so as to assist even a layman in understanding the intricate medical terminology and concepts in issue."12
Unfortunately for the plaintiff, Judge Selvam's scientific investigations failed to impress the Court of Appeal, in particular, Chief Justice Yong Pung How who said that the Bolam test was recognition "that judicial wisdom has its limits".
"A judge, unschooled and unskilled in the art of medicine, has no business adjudicating matters over which medical experts themselves cannot come to agreement."
He also warned that "excessive judicial interference raises the spectre of defensive medicine, with the attendant evils of higher medical costs and wastage of precious medical resources."13
Recently the Chief Justice of NSW (Honourable JJ Spigelman), has examined the merits of the Bolam test for professional negligence, and concluded:
"Until Rogers v Whitaker some Australian courts had followed the English Bolam test which, in substance, meant that it was not open to a court to find a standard medical practice to be negligent. That test applied not only to matters of diagnosis and treatment, but also to information and counselling.
The reinstatement by legislation of the Bolam test was considered in New South Wales last year in the contest of the adoption of the Health Care Liability Act 2001. This was not done. No doubt it is a matter again under consideration. It represents a principle that could be adopted and which restricts findings of breach. It is difficult to see any other change which will restore balance in those cases that are particularly likely to engage the compassion of the judiciary eg obstetrics cases which always concern injured children, or the tragic side effects that may accompany neurosurgery. There does not seem to be any reason why the Bolam test, if adopted, should not extend to all areas of professional negligence."14 Although not fashionable in all jurisdictions, the Bolam principle remains valid and is still used in determining cases.
The duty of care test has no consistency at law
Although a compelling moral argument ie that one should care for one's neighbour as one's self, the duty of care test opens a Pandora's box in legal terms, as Sir Harry Gibbs explains:
"In the leading judgment in that case [Donoghue v Stevenson, 1932] it was said that you must take reasonable care to avoid acts or omissions which would be likely to injure your neighbour, and that in law your neighbour is any person who is so closely and directly affected by your act, that you ought reason to have them in contemplation as being so affected when you are directing your mind to the acts or omissions which are called in question This statement of principle, based as it is on Scripture, is on its face persuasive but it has not provided a basis for the logical development of the law. It indicates that liability depends on a duty of care, but judges (including I must confess myself) have failed to agree on what test should be applied to decide when that duty arises."15 [underline added]
Serious legal questions, such as; Who is my neighbour? What duty of care do I owe? When does this duty arise? When does this duty of care cease?; have failed to be consistently determined in Australian law, such as to make it virtually impossible for any person to know in advance with any degree of certainty, what the law is.
In medical practice, with its multitude of variations and patient circumstances, this problem has been even further compounded.
The laws of negligence have been deliberately used as a compensation mechanism
As the Honourable J. J. Spigelman explains:
"In many respects the law of negligence is the last outpost of the welfare state. Notwithstanding that the system is based on a finding of fault, the practical operation of the law of negligence suggests that an element of welfare state paternalism, driven by compassion, may well exist. Furthermore, on some occasions there may have been inadequate weight given to the principle that an individual should take responsibility for his or her own actions."16
In recognition that the laws of negligence have lost community support, the Chief Justice of NSW, the Honourable JJ Spigelman AC, has proposed a range of reforms which he believes are
"more likely to be regarded in the long term as fair and therefore to receive broad community acceptance".17
The rationale for using the laws of negligence as a tool of the welfare state have been well explained and justified by Justice Michael Kirby.
"Most medical practitioners and healthcare workers are, directly or indirectly, covered for their negligence by policies of insurance. Medical practitioners are usually provided with the very best of defence by a system of mutual insurance. So the burden does not fall (for the most part) on the practitioner himself or herself. It falls upon an insurance fund. It is true that the medical practitioner pays premiums to establish and maintain that fund. As the fund is depleted by claims which are paid, the premiums must increase to replenish it. But it is not the practitioner himself or herself, ultimately who foots the bill. It is the consumer. Inevitably, the bill is passed on to the consumer in the form of medical fees. In this way, the patients themselves contribute, indirectly, to a fund which is there if they can establish liability when things go wrong. This is what judges and those who write the books on tort liability call loss distribution."18
Sir Harry Gibbs explains the injustice of the deep pocket test as follows:
"Some judges seem to strive to find a reason for finding in favour of a plaintiff, particularly if the injuries are serious, so that he or she may receive compensation. In the result, damages are sometimes awarded in cases in which a reasonable and informed person would not have thought that the defendant was at fault."19
There is overwhelming evidence that the laws of negligence are not applied objectively and are often misapplied for the purposes of delivering victims' compensation (deep pocket test). Not only is this tolerated by the Australia Judiciary, it is also justified in terms of loss distribution. This raises serious questions as to the due process of those accused of professional negligence and particularly, medical negligence.
The practice of medicine creates a unique contract between the doctor and patient that frequently allows the doctor with patient consent to perform various procedures or to prescribe medications in order to relieve suffering.
According to Medicare Statistics up to the March Quarter 2002, there were 52,698,145 Medicare rebateable transactions between doctors and patients during the quarter.
On an annualised basis this represents over 210 million Medicare rebateable transactions per annum. Approximately 92 million of these will be between patients and general practitioners and almost 6 million transactions per annum are categorised as operations (procedures).
Hence, as a profession, doctors have a significant exposure to a vast number of patients with varying conditions requiring expert medical advice and often serious intervention
On average, every Australian will visit or transact with a medical practitioner at least 10 times per year.
A practising doctor treats a substantial number of different individuals suffering from a variety of medical conditions. Hence, the exposure to negligence litigation is considerable in comparison with other professions with fewer and more established clients.
The law has long recognised that doctors and indeed health care workers acting in good faith as Good Samaritans in emergency cases should not be the subject of litigation for negligence.
In 1973 the Queensland Parliament enacted the Voluntary Aid in Emergency Act which limited liability of doctors in certain circumstances of emergency medicine.
"Liability at law does not attach to a medical practitioner or nurse in respect of an act done or omitted in the course of rendering medical care, aid or assistance to an injured person in circumstances of emergency - According to Butterworths Australian Legal Dictionary, gross negligence is:
"A conscious and voluntary act or omission performed without intent to cause death or grievous bodily harm but which involved such a great falling short of the standard of care which a reasonable person would have exercised and such a high risk that death or grievous bodily harm would follow that the act or omission merits criminal punishment. Nydam v R [1977] VR 430. Gross negligence causing death may amount to manslaughter: Andrews v DPP [1937] AC 576; 26 Cr App R 34; R v Buttsworth [1983] 1 NSWLR 658. The test for gross negligence is objective rather than subjective: R v Buttsworth."21
In NSW the Good Samaritan clause protects health care workers from "any civil action liability claim or demand in respect of the provision of health care" in cases where they are acting as Good Samaritans, namely outside hospital in emergency situations. This would appear to extend the QLD Act to all matters of negligence not just gross negligence, albeit a legal case will be necessary to see how the courts interpret Section 27 of the NSW Health Care Liability Act 2001.
NSW Health Care Liability Act 2001 - Sect 27
27. Provision of voluntary health care in an emergency
1) If a person to whom this Part applies provides health care to an injured person in circumstances of emergency:
the person cannot be subject personally to any civil action, liability, claim or demand in respect of the provision of that health care.
2) Subsection (1) applies in respect of a person to whom this Part applies only if the health care was provided by the person: in good faith, and on a voluntary basis without fee or reward or expectation of fee or reward.
For 30 years in Queensland, legislation has protected doctors and other health care workers from civil liability and professional negligence litigation other than for gross negligence when they are acting voluntarily in an emergency situation. In NSW, since 2001, doctors are protected from both from negligence and gross negligence when they are acting as Good Samaritans.
In answering this question the views of medical practitioners themselves, as expressed by Professor Helen Beh, CEO of the Australian Orthopaedic Association, that:
"The data also shows that at least one third of all claims have little, if anything, to do with medical negligence and that surgeons are shouldering the insurance burden for medical misadventure as well as the burden for medical negligence."22
An analysis of claims data by competent non medical academics concludes that for orthopaedic surgeons up to one third of all cases against them have no basis in negligence, let alone gross negligence.
In a presentation to the Institute of Actuaries of Australia XIII General Insurance Seminar in November 2001, three noted Australian actuaries, Gillian Harrex, Karen Johnston and Estelle Pearson reported:
"…a rapid escalation of claims costs for medical negligence in Australia over the last ten years."
Factors fuelling further increases in claims costs are -
Claims frequency has:
Overall, claims have increased 2.5 times over a ten-year period. Claim payments have increased three-fold in the last ten years and have increased by over 50% since 1995/96.
The issue of affordability of medical indemnity prices becomes even more complex due to:
The hardening global reinsurance market, together with our expectation of continued pressure on claims costs mean that doctors will be facing significant medical indemnity price rises.23 [underline added]
Qualified Australian actuaries have determined that both claims frequency and claims payments have increased significantly over the last decade and that the trend is continuing. Furthermore, that the affordability of medical indemnity insurance is also an issue that must be considered.
The short answer is no, but caution must be exercised in comparison with other countries. The most valid measurements are those with a similar medical system and medical culture to Australia.
A study by DN Dewees et al24 (1991), which examined medical malpractice trends in Canada and compared them with trends in the USA, UK and Australia was summarised by current Australian High Court Judge, Justice Michael Kirby, in his 1992 paper, "An Era of Change"25, and concluded the following:
Causes identified by the Dewees study as reported by Kirby, JM, included:
The sustained increase in both claims frequency and claims payments for medical negligence is not confined to Australia but is apparent in countries with similar medical systems, namely, USA, UK and Canada. Although the rate of increase in both claims and medical indemnity premiums varies, the undeniable trend is upward and will continue into the foreseeable future without structural change.
The following recommendations have been considered by the Council of Procedural Specialists as a means of preventing unnecessary litigation between doctors and patients. Currently patients, who are able to do so, sign an informed consent form prior to a medical procedure. The consent form requires a patient to acknowledge and accept the likelihood of an adverse outcome prior to medical treatment.
It appears to doctors that the consent form and indeed the consent process, is given little status at law. A patient may be able to claim that they were not able to understand it or not in a state of mind to comprehend it. This may be true for some patients.
However, whilst confused elderly and patients with language and comprehension difficulties require the help of guardians to assist in communication or in certain circumstances act on their behalf, this should not prevent the patient consent form gaining a greater status as a contractual document between the doctor and the patient whilst providing for special circumstances in the document itself and through legislation.
Legal advice would indicate that it is possible in a contract, between and doctor and patient, to include a clause that prevents the parties from litigating on the contract until the dispute is submitted to an agreed dispute resolution process as a first step.
Amendment of the Trade Practices Act and Fair Trading Act would have to be considered and legislative amendment would be required if the parties sought to agree to a binding arbitration process with no appeal.
Although not perfect in every circumstance, the Bolam principle holds out the prospect of a test for professional negligence and indeed negligence which gives some certainty to providers of a range of services that they will not be judged in retrospect to a standard they were unaware of or had no possible hope of attaining.
By legislating the Bolam principle as a defence against negligence, a community standard of negligence could be established that was both practical and provided justice, particularly against acts of gross negligence.
In his most recent recommendations Chief Justice Spigelman has proposed several reforms including the need to "Adopt the test for professional standards, the effect of which is that it is not open for a court to find a standard medical practice to be negligent".26
In simple terms, any person being held liable would have the defence that they were acting in accordance with the custom and practice of other people with similar skill in similar situations facing similar circumstances.
Hence, an organiser of a community event or a medical practitioner would be judged according to a standard that was commonly accepted by their peers and not to an arbitrary standard imposed for the purposes of rendering compensation. In the same manner a rural procedural GP, called in to do an emergency caesarean, will not have the same professional or structural support as, for example, a Professor of Medicine in a large metropolitan hospital. The Bolam principle, if correctly applied, ensures that these practical differences are taken into account when considering whether an act of a doctor was negligent.
Legislating the Bolam principle would go a long way to meeting the most important element of any law, namely community support and acceptance.
Many patients with life threatening or impairment of life quality situations may want the opportunity of an operation or treatment that holds out some possibility of saving their life or improving their quality of life. Risk and litigation management issues may make this treatment less likely to take place. Patients and doctors in this situation should be able to agree to waivers for all but gross negligence similar to legislation that has been passed for high risk sports and activities.
In any event, the injustice of a medical practitioner being held guilty of negligence for an act of misadventure is considered by the medical profession to be as serious an injustice as a person being found guilty of a criminal act when they are innocent.
The practice of finding doctors guilty of negligence for the purposes of compensation is by any standard a miscarriage of justice and a blight upon the Australian legal system. Few doctors who have been put in these circumstances recover their enthusiasm or desire to continue medical practice. The hidden cost in lost competent medical expertise is significant and avoidable.
It is therefore critical that cases of misadventure be removed from the courts. Limit of liability legislation would be one way of achieving this.
The current NSW Supreme Court Rules and NSW District Court Rules contain extensive provisions concerning the duty of experts. His Honour Justice Abadee conducted a working party together with Justice Sperling and others to prepare guidelines for the implementation of the Expert Witness program.
The phenomenon of the "hired gun" as an expert witness is a well known driver of medical litigation. Being judged by self appointed experts who may have no practical relevant experience in the matters being decided by the court brings discredit to the court and works against due process.
In a recent study of obstetricians, published in the Medical Journal of Australia, April 2002, a survey of 1,116 medical specialists holding a Fellowship from the Royal Australian and New Zealand College of Obstetricians and Gynaecologists resulted in 829 responses (74%).
In the area of expert opinion 38% of the respondents had been asked to supply a written expert opinion on an obstetrics case. 11% who had supplied a written opinion had done so on 25 or more occasions comprising 71% of the total number of opinions given with 6% of these opinions resulting in court testimony. Of those giving court testimony, 42% did not currently practise obstetrics.27
In two recent cases against Australian surgeons, the expert witnesses included:
Possibly the most alarming recent survey was that conducted by the Australian Institute of Judicial Administration, a summary of which was published in the Law Society Journal, April 2002.
It concluded:
"It would seem from the survey that magistrates do not hold experts totally or even substantially responsible for their misdeeds."
It is important that the expert witness system function effectively and that redress is available where it can be demonstrated that expert opinion is fabricated or given in malice.
The statute of limitations varies from State to State mainly in respect of the provisions for children under 18 years of age and people with disabilities.
Severe disability to any patient who has undergone medical treatment is a tragedy and this is particularly so with babies and children who may face a lifetime needing care and support. It is every doctor's worst nightmare, and accusations of causing severe impairment to patients are treated as the most serious of cases.
It would seem that except in very unusual circumstances most people, particularly parents or guardians, should know within three years whether they or those in their care have suffered grievously from an act of omission or commission involving a medical procedure.
A thorough study of all cases in NSW, particularly those involving late notification, would be helpful in examining whether or not this is the case.
The current problem is that the very category of cases which are most serious (birth injury cases) are the ones which are commenced after the greatest delay. Any delay causes prejudice to a defendant.
In the medical context, the busy practitioner may or may not have any recollection of the relevant patient after a number of years (depending on the nature of the medical contact), medical records and in particular hospital records may have been lost or mislaid or even destroyed.
Some witnesses may be interstate, overseas or dead. Medical defence organisations or insurers cannot properly plan and budget for these cases.
In the late 1970s, the most notable award for a severely injured person was in the order of $270,000 (total) in the case of Sharman v Evans. It is at around that time that a medical defence organisation would have needed to collect sufficient subscriptions from its members to meet the amount awarded to Calandre Simpson (in the order of $14 million plus millions of dollars in legal costs). If the same trend were continuing in to the future, medical defence organisations would need to collect sufficient premium from doctors to meet future claims of $700 million arising from a similar birth incident today.
Problems such as the above could be addressed in large measure by shortening the limitation period. There appears to be no practical reason why an infant needs three years after they obtain their majority to commence proceedings. In the case of persons suffering severe disability their proceedings are invariably commenced by a tutor or "next friend".
It would appear (although it will need to be substantiated from the data) that in the overwhelming majority of cases the tutor or next friend, is the parent. There appears to be no reason why the case could not be commenced within a few years of the child's birth. Even if it then became necessary to postpone the final determination of the case so that medical evidence could be obtained about the child's development over time, early notification would still help. With early notification, steps can been taken to obtain relevant statements, preserve records etc and plan financially for the value of the case.
The Tasmanian Limitation Act 1974 contains a general limitation of three years for the commencement of personal injuries actions (section 5). A judge may extent this for a period of no more than a further three years if to do so is "just and reasonable" (section 5(3)). Where the injured person is under a legal disability (such as a child) then the action must be commenced within six years (section 26). However an infant who is under the care of a parent would ordinarily need to comply with the three year limitation period.
A remedy for children who are not living in ordinary family circumstances or who are able to demonstrate that no one was acting in their best interests during their childhood could be the subject of application to the court for an extension of time in an appropriate case.
More research needs to be done to be able to project the impact that changes in the Statute of Limitation would have without prejudicing the rights of genuine claimants.
Progress is being made to ensure that that structured settlements do not disadvantage plaintiffs through unfavourable tax treatment.
At present, structured settlements appear to be an option.
Any person receiving lump sum payments are at risk of exploitation while often being dependent on others for advice and care. Court awards allocated for future care costs need to be preserved to meet those costs. Structured settlements would appear to be an effective means of meeting this objective and protecting the plaintiff's award.
The NSW Professional Standards Act 1994 allows schemes which have a maximum liability for a professional who complies with the Scheme. Doctors are excluded from the Act because personal injury is excluded.
Although the NSW Health Care Liability Act puts, to some extent, a boundary around the total costs of judgments, by allowing for an absolute limit of liability a medical indemnity insurer can obtain, with greater certainty, reinsurance and more accurately manage their claims provision. Furthermore, the limit of liability can be varied depending on the medical specialty and historical claims cost.
There is sufficient evidence that the custom and practice of the Health Care Complaints Unit is facilitating unnecessary litigation and imposing substantial costs upon doctors which are passed on in the form of higher fees to patients.
Part of the problem comes from not resolving patient complaints as close to the source of complaint as possible, although some Area Health Services do have a better track record than others. Some private hospitals are also reluctant to resolve an issue rather than refer to the Health Care Complaints Unit and more research needs to be done as to why this is the case.
Furthermore, the NSW Health Care Complaint Unit process appears to be a "catch all" of complaints. This centralised process involves sending out form letters to doctors which have little relevance and immediately generates costs to medical defence organisations.
Dissatisfaction is often driven by unreasonable expectations including unreasonable expectations of the complaints process itself, which appears to be overcentralised, bureaucratic and blame seeking in comparison with other States.
Currently it is claimed that there are about 6.3 million Australians protected by individual life disability and trauma policies (Fact Sheet, March 2002. Investment and Financial Services Association Limited). If this is correct it means that over 13 million Australians are not covered by this type of insurance.
Patients can experience impairment as a result of medical treatment which is not due to negligence or incompetence, but is an inbuilt hazard to providing the medical treatment. Absolute avoidance of these hazards is only achieved by withholding medical treatment. This is the ultimate in defensive medicine and means the patient is left to the fate of their condition.
At present an uninsured patient impaired by the occurrence of these hazards may be advised to seek compensation by commencing an action against the doctor for negligence. This process known as loss distribution is a lottery and even if a compensation payout is achieved it may be many years and involve deducting substantial costs.
Patient insurance which pays out on severe impairment as a result of medical treatment itself would establish a pool of compensation for victims of misadventure, in particular quadriplegia, paraplegia, and brain damage which require ongoing care and support for the lifetime of the patient.
For patient insurance to be feasible any impairment suffered by the patient would have to be clearly identified as a hazard arising during medical treatment and not be a pre-existing condition or a condition of the disease itself, ie it would have to be a clearly defined category of disability insurance which would be an addition to the current range of trauma and disability policies on the market.
To overcome the exclusions a broader disability insurance market would have to be more actively promoted for those who want to cover the likelihood of disability or severe impairment arising out of an event of life or misadventure. These conditions are best covered by disability insurance which should be available at an early age.
To be effective, episodic patient insurance poses challenges to underwriters. Boundary conditions have to be clear between conditions arising from medical treatment and pre-existing conditions and the boundaries between misadventure and negligence must also be defined.
Finally, for payouts to be significant there would have to be a widespread take up. These difficulties however, should not preclude development of a product that could prove cost effective in the long term and relieve patients with catastrophic impairment of the burden of the legal lottery.
Models for patient insurance exists in Sweden and Norway, which may prove a good starting point.
2
The Honourable Justice James Thomas. Judge of the QLD Court of Appeal (1998-2002). Insurance Crisis Blamed on Judges 'Playing Santa'. The Daily Telegraph, Edition 3 - MetroSAT, 23 March 2002, Page 4.
3
The Honourable JJ Spigelman. Chief Justice of NSW (1998 - ). Chief Justice suggests remedies for tort of negligence. Law Society Journal, June 2002. Pg 24
4
The Honourable Justice Michael Kirby, Judge of the Australian High Court (1996 - ). Patients' Rights - Why the Australian Courts have Rejected Bolam (1995) 21 Jnl of Medical Ethics.
5
In Blyth v Birmingham Waterworks Co (1856) 11 Exch 781 Alderson B
6
[1932] AC 562
7
Health Law, Commentary & Materials by Peter MacFarlane. Pg 86
8
Health Law, Commentary & Materials by Peter MacFarlane. Pg 86
9
Bolam v Friern Hospital Management Committee [1957] 1 WLR 582
10
Lord Scarman. Sidaway v Governors of Bethlem Royal Hospital. 1985 AC871
11
Bolitho v City and Hackney Health Authority. 13 November 1997.
12
The Retirement of Judge Selvam. Singapore Academy of Law Newsletter. Issue No.74. Pg 14.
13
The Straits Times, 26/4/02, Courts hearing negligence cases 'cannot play doctor' by Alethea Lim, Court Correspondent.
14
Honourable JJ Spigelman AC, Chief Justice of NSW. Negligence: The Last Outpost of the Welfare State. The Judicial Conference of Australia: Colloquium 2002. Launceston, 27 April 2002.
15
Sir Harry Gibbs, Living with Risk in our Society. 14 May 2002
16
Chief Justice suggests remedies for tort of negligence. Law Society Journal, June 2002. Pg 24
17
Chief Justice suggests remedies for tort of negligence. Law Society Journal, June 2002. Pg 24
18
Justice Michael Kirby. An Era of Change. The 1992 National Medico-Legal Congress.
19
Sir Harry Gibbs. Living with Risk in our Society. 14 May 2002.
20
Voluntary Aid in Emergency Act 1973 (Qld)
21
Butterworths Australian Legal Dictionary. 1997
22
Prof Helen Beh, BA, MSc, PhD, FASP. CEO, Australian Orthopaedic Association. Medical Litigation in Orthopaedics: Facts and Figures. The Rise and Rise of Medical Indemnity Costs. Conference 10-11 March 2001, Sydney.
23
Medical Indemnity in Australia. Presented to The Institute of Actuaries of Australia XIII General Insurance Seminar. Gillian Harrex, Karen Johnston and Estelle Pearson. 25-28 November 2001.
24
DN , Dewees, MJ, Trebilcock and PC, Coyte, "The Medical Malpractice Crisis: A Comparative Empirical Perspective". 1991
25
Kirby, JM. An Era of Change. The 1992 National Medico-Legal Congress.
26
Chief Justice suggests remedies for the tort of negligence. Law Society Journal. June 2002
27
Projections of Australian obstetricians ceasing practice and the reasons. Medical Journal of Australia. 6 May 2002
Conclusion
5 Professional negligence vs ordinary negligence and the Bolam principle or Bolam test
Conclusion
6 Is the Bolam principle accepted legal practice today?
Conclusion
7 What is wrong with the laws of negligence as they apply to professional negligence in Australia and specifically to medical negligence?
Conclusion
8 The laws of negligence have been deliberately used as a compensation mechanism.
Conclusion
9 What makes the practice of medicine different in terms of professional negligence exposure?
Conclusion
10 Special consideration for doctors.
if NSW Health Care Liability Act 2001 - Sect 27
Conclusion
11 Medical indemnity - Is there a problem?
Conclusion
12 Is the rise of medical litigation a uniquely Australian problem?
Conclusion
13 Specific proposals for tort law reform
Consider legislation which would allow a signed "Patient Consent Agreement" which identifies the possibility of serious and rare complications to be a defence against "failure to warn".
Consider legislation which would allow for agreements between patients and doctors which contain alternative dispute resolution procedures, in particular, which stipulate a compulsory meeting between the doctor or doctors and patient prior to the commencement of any legal action.
Consider legislation to establish the Bolam principle as the determinate test of negligence.
Consider legislation to extend a "Limit of Liability" clause to medical procedures and hence remove litigation for all acts except gross negligence ie waivers for medical procedures.
Consider legislation to require expert witnesses to have practical experience and relevant qualifications.
Consider the possibility of improving the statute of limitations to encourage early notification by adopting throughout Australia, the Tasmanian Limitation Act of 1974.
Consider legislation that mandated Structured Settlements for all Awards over $100,000 (after legal costs and disbursements were deducted), unless the plaintiff is able to show a court that a structured settlement would be to their severe disadvantage.
Consider legislation to amend the NSW Professional Standards Act 1994 to allow for an absolute limit of liability of doctors for personal injury.
Consider legislation to reform the NSW Health Care Complaints Process
Consider the possibility of developing episodic patient insurance
1
Sir Harry Gibbs. Chief Justice of Australia (1981-1987) Living with Risk in our Society. 14 May 2002.
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