MEDICAL NEGLIGENCE CLAIMS: THE NEGATIVES, POSSIBLE SOLUTIONS THERETO AND THE POSITIVES - WHAT IT MEANS FOR THE DEVELOPMENT OF OUR LAW AND HUMAN RIGHTS

MEDICAL NEGLIGENCE CLAIMS: THE NEGATIVES, POSSIBLE SOLUTIONS THERETO AND THE POSITIVES - WHAT IT MEANS FOR THE DEVELOPMENT OF OUR LAW AND HUMAN RIGHTS

First Published on January 24, 2017 on LinkedIn

The negatives

In the last decade, medical negligence claims have absolutely skyrocketed. Not many reasons are proffered for this as it has been solely a blame game by the Department of Health ("DOH") and insurers such as the Medical Protection Society ("MPS") covering the claims of the private medical and allied health professions. Instead of finding a solution through training and better facilities as it relates to public health and fighting the spurious claims on the side of both public and private, a plaster is offered to treat a weeping sore so to speak.

MPS (and I'm sure others) keep increasing their premiums to the extent that many specialists are no longer prepared to continue practicing to foot the insurance bill and junior doctors choose less risky specialties to train in causing a brain drain in those very specialities. The blame for the enormous increase in claims in the private sector is, similarly to the public sector, put before the door of the attorneys who make it their business to seek out such claimants. The current Minister of Health, Dr Aaron Motsoaledi, ("the Minister") has been particularly scathing towards the medical negligence legal fraternity and many a journalist has jumped on the band wagon without properly considering the issue.

As in the private sector, the Minister tries to stem the flow of claims by simply putting a plaster on the festering sore in that talks are already afoot to limit claims (as with claims against the Road Accident Fund - "RAF") and provide an undertaking for medical expenses i.e paying for the treatment yourself before claiming the money back from what would have to be a dedicated claims department at the DOH. The impact of this, as in RAF claims, would be that those who cannot afford to pay first (e.g. indigent parents of children diagnosed with cerebral palsy after suffering from birth asphyxia) would be severely prejudiced as state health facilities only provide the most basic treatment for these kids (especially in poor areas), the parents often having to travel some distance to get to a treating facility and a family member giving up their own employment to act as caregiver. The child's chance of making a meaningful contribution to society through continuous treatment and skills training is forever lost.

Is there a solution?

So, how do to we treat the avalanche of claims? The DOH firstly would have to admit that their services to the public at large fall well short of a reasonable standard of care. (Please note that there are dedicated and hardworking medical personnel all over the health industry and their efforts should not be overlooked). Hospital buildings, equipment and ambulance services are either in a state of disrepair, non-existent or stuck with some committee or department that needs to make a decision. Medical personnel are in short supply and the predicted shortage in certain areas of expertise would have an impact on both the public and private sectors. An urgent need exists to involve the private sector in public health services in joint partnerships to assist in the overflow of patients and in particular in specialised fields. This would be especially helpful in the smaller communities. The establishment of non-profit organisations that can place medical personnel from across the world (in a GAP year) in mobile treatment units can also be explored. Last mentioned has been successful in the wild life industry in particular. The fact that medicine requires specialised skill cannot be ignored but it should not be impossible to extend such working visitors visas to doctors, nurses and the like.

One solution proffered to the private sector is to fight the ambulance chasers with all the might of the law in instances where there is no or little merit in the claim. Too many matters are settled that genuinely had a chance of success in a court of law. One just has to request statistics from insurers on how many matters are settled and how many proceed to trial to realise that the scales weigh heavily in favour of settlement. This has three negative outcomes, the lawyers become more motivated to institute action as they almost always get paid their fee up to 25% of the capital amount paid (see the Contingency Fee Act 66 of 1997 - "The Act")) at no or very little risk to themselves. Unscrupulous medical professionals become hired guns and the medical fraternity lose faith in the legal system and their own ability to perform up to standard affecting morale and by extension productivity and performance.

Defending worthwhile cases would not prevent the institution of litigation at the outset but would curb pay outs to non-deserving claimants and slowly but surely the legal fraternity would stop fighting claims with no or little merit as they stand to make substantial losses due to the capital input required to fight a medical negligence claim at their own cost (see The Act) thereby reducing the number of claims and the negative consequences thereof.

The second option, and probably the best option for both public and private, would be to ensure that the medical doctors and the medical facility subject all legal action to mandatory mediation prior to the matter proceeding to trial. The pre-trial courts already in place in all courts in RSA can simply refuse parties certification for trial (See Practice Directives available on https://johannesburgbar.co.za/ in re: certification) if meaningful mediation was not undertaken. The emphasis is important as matrimonial mediation has been failing divorcees for many years due to a lack of understanding of what mediation should be i.e guidance and not decision making for the parties and a general misunderstanding from both the public and the legal fraternity on what mediation is.

Legal costs would be substantially reduced and matters can be finalised much sooner if one considers that new trial dates are already being allocated into the end of 2018 and beyond in most divisions. The presence of legal representatives and experts should be encouraged due to the complexities of medical negligence disputes and the disparity in power between doctor/hospital and patient with their role reduced to giving guidance rather than fighting the fight for the patient as the decision to settle remains that of the parties and can't be forced upon them. Last mentioned would still be cheaper than full blown litigation. The very important underlying maxim of total confidentiality in mediation encourages honesty between the parties as nothing said in mediation (bar the final settlement agreement) can be used in a court of law.

The positives

It would be impossible to find something positive in this one would think, but that would be incorrect. The law is and always would be the tool to apply checks and balances and medical negligence litigation should certainly force the DOH to take a hard look at the manner in which their institutions are run, find inventive ways in which to solve their staffing, space and equipment problems so as to ensure that the poor in this country has adequate health care, a basic human right underlying all other human rights as it is a necessity for a life itself (See section 27 (1)(a & b) of the South African Constitution). Currently the-plaster-over-oozing-sore view of medical negligence litigation is hampering this positive and one could only hope that the DOH realises that they shouldn't blame the lawyers for what is clearly a disaster in public health care. One just has to look at the number of legitimate birth asphyxia matters in court on a daily basis and increasing exponentially to know that there is something seriously wrong in perinatal and neonatal care in the public sector at an estimated cost of R20 million per claim.

Placing the blame at the foot of the lawyers also loses sight of the right of the patient to defend those rights, another right protected by the South African Constitution (Access to Courts - Section 34) and to do so with legal representation. This is equally true for both public and private sector disputes, although privately insured doctors and hospitals may have those rights curtailed by an overzealous insurance provider with settlement fever.

Over-compensation in patient treatment is seen as a negative by the medical aid schemes in that it is one of the many things that is blamed for the higher than average medical inflation. I for one would prefer my doctor to rather overcompensate than just doing the basics to appease the medical aids and I would like to surmise that this very "problem" has probably led to many a diagnosis that may have been missed at first bat.

Medical Negligence litigation has contributed hugely in the last decade but in particular in the last year, to the development of the common law. Age old cases on the duty of care have been revisited and refreshed. The Consumer Protection Act (68 of 2008) (See my article in De Rebus June 2012 p22-25 "The Law of Contract, the Consumer Protection Act and medical malpractice law") has added a whole new dimension (albeit seriously underutilised in my opinion) to services and goods provided by medical health professionals and the like. The South African Constitution recently found in favour of cases arguing the provisions of the Prescription Act (68 of 1969) as it related to when knowledge is acquired of harm done and then there is now a veritable smorgasbord of case law on medical negligence that was once in short supply.

As such, from a legal standpoint, we should thank the personal injury practitioners for developing our law and protecting human rights, both from a plaintiff and defendant perspective and the public and private sectors should join hands to seek a solution to the problem that lies at the heart of the very healthcare provided.

CONTINGENCY DEDUCTIONS IN ACTUARIAL CALCULATIONS 101

INTRODUCTION

On 1 August 2008, the new RAF Act changed the lives of many people in that there was no longer an automatic right to general damages for inter alia pain and suffering. This meant that clients whom had suffered a loss of earning capacity was suddenly left without compensation and many a matter was settled on the basis that the plaintiff was only entitled to an undertaking. The right to an undertaking and the admission that an undertaking is needed for future medical expenses can be a basis for an argument on loss of earning capacity as the plaintiff wouldn’t need cover for future medical expenses if there was nothing wrong with her and would further need time off work to attend to such treatment which would translate into a loss of earning capacity.

The traditional view of damages is that you cannot separate the different heads of damages in such a manner as to decide one before the other, this essentially comes from the point of view that a loss of earning capacity should be bundled under general damages. The now infamous Deysel v RAF matter (unreported Bizos AJ) was and still is widely used in SGHC by RAF counsel (and some Judges) to force a postponement until general damages is decided (where these have been referred to the HPCSA) or to state that a loss of earning capacity should only increase the amount of general damages as the plaintiff will ‘struggle’ to do their job and an actual loss of earnings cannot be demonstrated.

It is however not that simple, a loss of earning capacity goes to the heart of the client’s ability to earn a living and in particular to the possibility of future loss of earnings due to time of work for treatment or losing out on a promotion. As much of last mentioned is often a possibility as opposed to a probability which would show a direct loss based on the evidence at hand, it cannot be ignored for various reasons. The court in Southern Insurance v Bailey (SCA) clearly stated that one cannot adopt a non-possumus attitude to loss simply because it cannot be quantified in general terms. A loss of earning capacity can also not be ignored because of the maxim of the ‘once and for all rule’ which does not allow a claimant to return for another slice of damages at a later stage.

This means that any possibility of a future loss must be taken into consideration over and above normal contingencies which an actuary would already be applying. These ordinary contingencies would not be visible in a calculation to an untrained eye as it is normally done by means of various algorithms that are automatically applied. Robert Koch in his book, The Quantum of Damages has various tables for longevity which are implemented automatically by actuaries based on the earnings and economic circumstances as well as for instance HIV status of a plaintiff (last mentioned can be more complicated though as the CD 4 count is taken into consideration) Koch also refers to normal contingencies being 5% (but for the accident on past loss) and 15% (now that the accident has happened on future loss). There is a myriad of case law on this aspect and in particular an old argument that a ½% per year should be allowed till date of retirement from date of calculation as a normal contingency) There is also a school of thought that feels that there should be no pre-morbid deduction of 5% (I’m one of them) as there is no possibility of anything unforeseen happening as it’s already in the past.

The above 5% and 15% is deducted from what the plaintiff would have earned if the accident did not happen for future possibilities such as death. The deduction is found in the first column of an actuarial calculation (depending on the actuary’s style) and is referred to as a negative contingency as it reduces your loss (explained below in more detail). The amount to be deducted from the second column is called a positive contingency as it increases the loss and this deduction is based on possibilities for a future loss of earning capacity including the prospect of early retirement. If one starts on Koch’s 15% as a normal contingency it would mean that one can never go lower than 15% on the positive deduction as that would mean that the plaintiff now has a better chance of survival than before the accident. One also cannot simply manipulate the contingencies where the plaintiff’s earnings is subject to the RAF CAP (Sweatman v RAF – SCA) without getting another calculation done unless the plaintiff falls far below the CAP. Simply lobbing off an amount from the total and calling it a contingency is also incorrect as the loss lies in the percentage difference between the negative and positive contingency and as such without a negative contingency being applied a positive contingency would skew the loss in favour of the defendant (see below).

A negative contingency can also be applied if the plaintiff is placed in a very high pre-earnings scenario, but for the accident, which scenario is for the most part only a possibility.

THE CALCULATION SIMPLIFIED

The easiest way to look at how the loss is calculated is to use an amount of R1000 in earnings for a client that could show no probability of loss, only a possibility and as such his earnings is calculated as also being a R1000 after the accident in question. We will ignore past loss.

BUT FOR THE ACCIDENT                                               NOW THAT

Earnings                    R1000                                                R1000

Less Contingency    15%                                                    25%

Equals                       R150                                                  R250

Loss                           R850                          minus            R750              = R100          

Without contingencies, no loss.

The calculation of the loss is based on what is referred to as a contingency differential i.e. the 10% difference between the 15% and the 25% and because the positive contingency is higher than the negative contingency you show a loss.

If the scenario was the other way around, say for instance where you reflect a loss based on a loss of a promotion (which was only ever a possibility) you can apply a negative contingency which would looks as follows.

BUT FOR THE ACCIDENT                                               NOW THAT

Earnings                    R10 000                                             R1000                       

Less Contingency    20%                                                    25%

Equals                       R 2 000                                              R 250

Loss                           R8 000                       minus            R 750             = R7 250      

Without contingencies, the loss would be R 9000, hence the application of the higher but for contingency being referred to as a negative contingency as stated before, it reduces the loss.

CONCLUSION

An actuarial calculation can be manipulated in several different ways to ensure that client has the best and most reasonable outcome in any claim for damages. Aspects such as retirement age as well as the date on which a client will stop getting salary increases and the discount rate applied for capitalisation can all have an impact on the loss and will explain why on the same facts two actuaries with different instructions can come to a completely different conclusion.