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  • Overview

    Would you sign a contract with a builder if you knew that his or her insurer was; unregulated, had limitless discretion on whether to cover a claim or not, where there was no obligation to even explain the reason why they are not indemnifying and no right to appeal the decision?

    Most people are unaware that nearly all doctors in the UK are ‘insured’ with one of three Medical Defence Organisations (MDOs): Medical Defence Union (MDU), Medical Protection Society (MPS) and Medical and Dental Defence Union of Scotland (MDDUS). MDOs are not regulated like an insurance company would be, they have limitless discretion on whether to indemnify a doctor or not, and are the ones that make decisions on indemnity, as they see fit, with no right to an appeal or even an explanation.

    This is a loophole that needs closing and the recent scandal involving breast surgeon, Ian Paterson has highlighted some of the issues at play in these cases. Below we will look at how the courts have tried to plug some of the gaps.  

    Breast Surgeon Mr Ian Paterson, performed unnecessary and incorrect operations on over 1,000 women and men in two private hospitals in the West Midlands from 1993 to 2012. In 2012, Mr Paterson was suspended by the General Medical Council and he has since been found guilty of 17 counts of wounding with intent and three counts of unlawful wounding. 

    Mr Paterson performed unnecessary surgery and also left patients prone to cancer returning, because of an untried technique.

    Private healthcare firm, Spire Healthcare Limited agreed to pay compensation, in the amount of £27.2m, with £10m coming from Mr Paterson’s insurers and the Heart of England NHS Trust. The Heart of England NHS Trust was part of the civil action because it is alleged that it failed to notify Spire of Mr Paterson’s dangerous methods which they discovered whilst working for Solihull Hospital. 

    When negligent treatment occurs in an NHS hospital, it is the relevant NHS Trust, and not the doctor or doctors responsible for the negligence, that covers the cost of a compensation claim. This is because the doctors are employees of the NHS Trust. When negligent treatment occurs in the private healthcare setting, the insurance burden for a negligence claim falls on the private doctor responsible for the negligence, because they are operating as private contractors out of the private hospitals or clinics. 

    However, if a doctor’s conduct is held to be criminal, there is no guarantee his or her insurance will be valid. Therefore, patients are often not as secure, when undergoing medical treatment privately as they would be in the NHS. If an insurer refuses to indemnify the private doctor, patients may only be able to secure compensation against the private doctor’s own assets, which is inherently risky as there may not be enough value in the assets to cover the cost of the compensation claim and the legal costs, thereby limiting what, if any compensation they can recover. 

    The insurer indemnifying Mr Paterson was the Medical Defence Union (MDU). As they are a ‘defence union’ and not an insurer they are not governed by the same regulations. They applied their discretion to restrict their contribution to the compensation claims being brought. Therefore, despite the fact Mr Paterson was primarily liable for the clinical outcome, this left many claimants uncompensated or having to settle for an undervalue. Spire Healthcare Ltd was brought into the civil claims for negligence to, in effect, cover the shortfall left by the MDU. 

    It was argued, by Spire that Mr Paterson was not technically their employee and they could not, therefore be held responsible for his negligence and fund any compensation payable as a result. Allegations against Spire included vicarious liability for Mr Paterson and non-delegable duty of care to their private Hospital patients, such that Spire was liable for the acts or omissions of Mr Paterson. 

    Non-delegable Duty

    On balance, it is more likely than not that a hospital would owe a non-delegable duty to a patient. Whilst they may have a choice over the identity of a surgeon who carried out their treatment, they do not have a choice over the employment status of that surgery and therefore do not have control over the way in which the hospital operates.

    Vicarious liability

    It is established law that an employer can be liable for the negligent act carried out by an employee in the course of their employment. The test that is to be applied to assess whether the act was in the course of employment is if it is either; a wrongful act authorised by the ‘master’ or, a wrongful act which is an unauthorised mode of doing some act authorised by the ‘master’. 

    Where the act is a criminal act, the employer can still be vicariously liable, so long as the act has a sufficiently close connection with the role for which the employee was employed. 

    Where a non-employee commits a criminal act, liability is more complicated. However; the law appears to be making steps for an organisation to be held vicariously liable for the negligence or criminality of an independent contractor (as opposed to being found liable on the basis of a non-delegable duty) and ultimately, for public policy reasons, the law will evolve to a situation where it is no longer possible to exclude independent contractors from the scope of vicarious liability. Therefore doctors are not true "independent contractors", they are engaged in an environment run and organised by hospitals, which presumably imposes; working conditions of sorts, times, rules and regulations, and practises. Recent case law suggests it would be possible to make hospitals vicariously liable for the negligent or criminal acts of the private doctors working out of their rooms and theatres.

    We of course welcome the changes and hope that this will offer injured patients better security in obtaining the compensation they deserve against private doctors, when before they may have been left uncompensated for injuries sustained at the hands of a private doctors negligence/criminality.

  • Related Services

    Clinical Negligence Compensation Claims

    We have one of the most well-established and experienced clinical negligence teams in the country. Our clinical negligence lawyers have a reputation for winning complex medical negligence cases and we have helped thousands of people claim compensation.   

    Accident & emergency claims

    Our clinical negligence team has long experience in dealing with compensation claims arising from negligence or errors made by the Accident and Emergency (A&E) department. Contact one of our specialist lawyers for a free initial consultation to find out if we can investigate your case with the financial security of a no win no fee agreement.

    Claims for general medical problems

    Clinical negligence claims are often highly complex. If you have suffered as a result of negligence at a hospital or GP surgery, our specialist clinical negligence solicitors will investigate your medical negligence claim thoroughly and independently. Contact one of our specialist lawyers for a free initial consultation to find out if we can investigate your case with the financial security of a no win no fee agreement.

Get In Touch

By submitting an enquiry through 'get in touch' your data will only be used to contact you regarding your enquiry. If you would like to receive newsletters from Thomson Snell & Passmore please use the separate form below.

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General Private Client UpdatesGeneral Commercial UpdatesConstruction UpdatesCourt of Protection UpdatesAgriculture & Rural Affairs UpdatesCommercial Property UpdatesEmployment UpdatesDispute Resolution UpdatesCorporate & Commercial UpdatesCharities & Not for Profit UpdatesFood & Drink UpdatesEducation UpdatesTransport & Logistics UpdatesFamily Business & Owner Managed Businesses Updates

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Rebecca Morgan
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Jargon Buster