The New Landscape in Clinical Negligence Litigation

Transcription

1 EMBRACING REFORM The New Landscape in Clinical Negligence Litigation May 2014 Contents Embracing reform 2 Key issues driving change Periodic payment orders 3 A new approach to compensation payments Pre-action protocols 5 Positive options for dispute resolution Case management in England and Wales 6 A blueprint for reform in Ireland? Open disclosure national policy and guidelines 8 Promoting better communication The Medical Council recent developments 9 The regulatory agenda Partnership agreements 10 Vital business arrangements Conference programme 12 On behalf of Hayes solicitors, you are all very welcome to our conference Embracing Reform: The New Landscape in Clinical Negligence Litigation. We have been at the forefront of defending clinical negligence claims for decades, and today s conference is part of an ongoing effort to ensure positive reform to achieve a more streamlined and cost-effective way of dealing with these claims. The proposed changes which are being discussed today arise from the reports issued by the Working Group on Clinical Negligence Litigation, chaired initially by Mr Justice John Quirke and subsequently by Ms Justice Mary Irvine. These changes truly will transform the landscape of clinical negligence litigation. They should result in clinical negligence legal complaints being dealt with sooner and for less cost. That, no doubt, will be welcomed by all. I commend the members of the Working Group, many of whom are here today, for the time, effort and expertise they brought to their task. I particularly note the contribution of Mr Justice Quirke and Ms Justice Irvine, and pay special thanks to them for being here today to take part in our conference. I also thank all our other speakers for their input to an excellent programme for this afternoon. I hope that you find the conference interesting and stimulating and that it will help us all to be ready to embrace these welcome reforms when they are brought into law. David Phelan / Managing Partner dphelan@hayes-solicitors.ie driven by knowledge and experience

2 Embracing reform Ciarán O Rorke outlines the key issues driving the agenda for reform in clinical negligence litigation. The title of our conference Embracing Reform: The New Landscape in Clinical Negligence Litigation could not be more apt in light of the ongoing challenges faced by hospital, medical and nursing staff in providing treatment to the required standard and meeting patient expectations. Recent events have thrown the spotlight not only on how patients are treated in our hospitals and by healthcare professionals, but also on how clinical negligence claims are being processed through the court system. It is against this background that the President of the High Court, in February 2010, established a Working Group on Medical Negligence Litigation and Periodic Payments. The Working Group, initially chaired by Mr Justice John Quirke and subsequently by Ms Justice Mary Irvine, comprehensively examined the current adversarial system in the management of medical negligence claims and identified many shortcomings within that system. The publication of the Working Group s first report on Periodic Payment Orders in October 2010 received widespread praise and its recommendations are awaiting Government approval. Already, pending the introduction of the necessary legislation, lawyers for plaintiffs and defendants are effectively working together to allow the courts to grant interim payment orders with the parties consent. To date over 25 such orders have been made. However, stability and certainty are two pillars of the legal system and legislation is urgently required to fill the current lacunae. The Working Group also considered at length whether or not the current Civil Justice System in Ireland meets the needs of plaintiffs and defendants especially taking into consideration the stringent adversarial approach adopted by both plaintiff and defendant lawyers and based on the somewhat outdated court rules. It is in this particular area that clear shortcomings were identified. A comprehensive report has been submitted to the President of the High Court recommending further legislative reforms including the introduction of a preaction protocol and more effective case management procedures. The Working Group paid particular attention to how medical negligence litigation is conducted in the United Kingdom since the introduction of the Civil Procedure Rules (CPR) in April 1999, and as amended subsequently, accompanied by various legislation including the Damages Act 1996, the Courts Act 2003, the Damages (Variations in Periodic Payments) Order 2005 and the Compensation Act It is already clear that the pre-action protocol and case management rules in the UK have proved very successful as they minimise the adversarial approach in the conduct of clinical negligence actions and allow for settlement of claims at the earliest possible opportunity. Our conference today will give practical insights and unique perspectives from leading figures in medical negligence in Ireland and England. The conference theme, Embracing Reform, is an opportunity to focus on the reforms required to introduce a change in litigation culture with the emphasis on earlier resolutions of claims, reduction in legal costs and a more satisfactory outcome for patients and families. This newsletter covers wide-ranging topics including periodic payment orders, open disclosure, pre-action protocols and case management of clinical negligence claims. It also covers recent developments in the Medical Council as well as partnership agreements. If you have any comments on the newsletter, do let us know. Hayes solicitors are determined to play our part in advocating reforms. We sincerely believe that today s conference will generate positive debate on the future conduct of clinical negligence claims with a view to bringing about a new landscape in litigation. The discussions today will be thoughtprovoking. We welcome your feedback and contribution to the debates. Ciarán O Rorke Partner / Head of Healthcare cororke@hayes-solicitors.ie 2 Embracing Reform

3 Periodic payment orders A new landscape for damages in catastrophic injuries actions Mary Hough looks forward to the introduction of a major change in the compensation system in catastrophic injuries cases. We are hoping to soon see significant change to the way in which damages are dealt with by the courts, in particular where an injured party has been awarded substantial damages for catastrophic injuries. Last year the Government approved proposals by the Minister for Justice, Equality and Defence to prepare legislation to give the courts power to make periodic payment orders (PPOs). It is hoped that legislation will be enacted in The Working Group on Medical Negligence and Periodic Payments (Working Group) in its first report published in October 2010 had recommended that legislation should be enacted to empower the courts to make PPOs (whether consensual or otherwise) to compensate injured parties in cases of catastrophic injuries where long term or permanent care will be required, subject to the courts being satisfied that the continuity of the periodic payments will be secured. It is anticipated that the legislation will closely mirror the Working Group s recommendations. The introduction of PPOs will bring about a major change to the current method of awarding compensation in personal injuries actions. At present compensation is by way of a single lump sum of damages intended to compensate for all past and future losses, including pain and suffering (general damages) and expenses/financial loss (special damages). The Irish courts apply the legal principle of restitutio in integrum (restoration to original condition) in an attempt to put injured parties back, insofar as money can do, in the same position that they would have been in but for the injury. The new regime will change this in catastrophic injuries cases in which a substantial part of the award will be paid out over the life of the injured party at intervals rather than in a single lump sum. It has long been considered that the single lump sum award is inadequate and inappropriate in cases where an injured party has been catastrophically injured. It is almost impossible for a lump sum payment, however carefully calculated, to accurately compensate an injured party. In almost all cases the injured party will either be over-compensated or undercompensated. What are PPOs? PPOs provide for a series of regular payments to be made to an injured party for certain heads of damage to meet their needs over their lifetime. A lump sum is also awarded for general damages, past and future loss of earnings and items of past special damages, including past care. The regular payments are typically made annually and are linked to an inflation index. There may be provision for stepped payments to allow for adjustment for example on the injured party attaining a particular age when his care needs may change and the regular payments are adjusted up or down accordingly. What heads of claim can PPOs apply to? PPOs can apply to any future pecuniary loss but the experience to date in the UK, which has had similar legislation in place for the past 11 years, has been that they apply primarily to the future cost of care and the future provision of medical and assistive aids and appliances. The Working Group in its report recommended that the court should have power to order PPOs in respect of the cost of future treatment, future care and the future provision of medical and assistive aids and appliances. The Working Group recommended that where the court considers it appropriate and in the best interests of the injured party that such an Order should be made, provided that the parties have been given an opportunity by the court to make submissions and be heard in full on the relevant issues. The Working Group also proposed that the court should be empowered to make PPOs to compensate for future loss of earnings only with the consent of the parties to the claim. In other words, without such consent the current method of compensating for loss of earnings by a lump sum will continue to apply. How do PPOs work? The following is an example of how a PPO might work in practice. In the case of a catastrophically injured minor, instead of a single lump sum award of, for example, 5 million based on life expectancy, a PPO award could look like this: Lump sum payment 1,300,000 General damages 450,000 Retrospective care costs 140,000 Loss of earnings 350,000 Special damages to date 110,000 Accommodation 250,000 Total 1,300,000 Plus annual payments for future care, future medical and assistive aids and appliances To age 18 From age ,000 p.a. (indexed) 150,000 p.a. (indexed) The above figures do not necessarily make up an award of 5million. Instead, what the PPO does is ensure that the injured party is accurately compensated for his needs as they arise during his lifetime. If the injured party survives beyond his expected life expectancy he will continue to be compensated throughout his lifetime. In such circumstances the ultimate size of the award may be Embracing Reform

4 considerably in excess of 5 million. On the other hand if the injured party does not survive as long as expected the compensation payments will end on his or her death. What is happening in catastrophic injury cases while the legislation is awaited? Until the legislation introducing PPOs is in force the courts have no power to order PPOs. However, a number of catastrophic injury cases have been before the courts in recent years in which the concept of PPOs has been introduced. In these cases the parties, with the approval of the court, have agreed a lump sum (for general damages, past and future loss of earnings and items of past special damages) and also for a sum of money for several years of future care. The case is adjourned for several years with the intention that a final order may be made when the PPO legislation has been enacted. This agreement by the parties, approved of by the court, has essentially the same effect as what will be achieved when PPOs are in force. Many of these cases have come before the courts again and as the PPO legislation is not yet in place, the parties have agreed to further adjourn the cases for several years to await the PPO legislation. In some cases, the parties, with the approval of the court, have agreed a sum for care and medical and assistive aids and appliances for the period of the second adjournment on the same basis as when the case was first adjourned. In other cases, the parties have agreed different terms for the further adjourned period. A small number of injured parties have exercised their entitlement to seek a lump sum rather than waiting for the PPO legislation to be implemented. Unfortunately, the current absence of legislation to enable the courts to order PPOs has created uncertainty for injured parties and for defendants and resulted in increased legal costs. Significant legal costs are incurred in relation to negotiating and agreeing each of the interim arrangements and further legal costs will be incurred when the interim period ends. It is preferable therefore that when the parties are agreeing a lump sum together with a sum of money for several years future care, that the case is adjourned for 3 years or longer. The UK experience The UK courts have been empowered to order periodic payments since the Damages Act 1996 as amended by the Courts Act The Courts Act 2003 provided for the amount of the payments to vary by reference to the retail prices index but also made allowance for this to be disapplied or modified. In a series of seminal cases known as the Thompstone cases the application of the retail prices index was successfully challenged. The court held that the indexation for future care costs should be linked to the Annual Survey of Hours and Earnings (ASHE) prepared by the Office for National Statistics. Unfortunately, there is currently no equivalent survey in Ireland and the issue of indexation is yet to be decided. The Central Statistics Office has however looked at this issue and identified the basis for a suitable index. We are awaiting the publication of this index. Advantages and disadvantages of PPOs. Advantages to periodic payments for injured parties include the following: the value of the annual payments is not eroded if linked to an appropriate index. annual payments will last throughout the period of the loss so there is no risk that the award will be exhausted. payments are tax free and no tax is payable on the annual PPO amount. there is no investment risk as there is with a lump sum. security and peace of mind for the injured party and their family. For defendants the advantages are: annual payments result in better control of cash flow for the State where it is the defendant. the risk of overpayment is limited. arguments over life expectancy are minimised. There are some, but fewer disadvantages for both parties, including the fact that they will have a continuing financial tie to each other for the injured party s lifetime. For plaintiffs, there is not the same finality as with a lump sum. For defendants, there is an increased administrative burden. If a defendant is unable to self fund they will need to demonstrate the ability to continue to make the payments into the future. This may necessitate purchasing annuities which at present are in very scarce supply and are expensive to fund. The annual payments throughout the life of the injured party which PPOs will introduce will provide welcome security and peace of mind to injured parties and their families. In accordance with the principle of restitutio in integrum, PPOs, as opposed to lump sums, will undoubtedly provide far greater accuracy in compensating injured parties. As such, the introduction of legislation to empower the courts to make PPOs must be a very positive and significant change to the administration of justice in cases of catastrophic injury. Mary Hough / Partner mhough@hayes-solicitors.ie 4 Embracing Reform

5 Pre-action protocols Aoife Nally Associate Evidence from England and Wales makes a strong case for introducing a pre-action protocol for clinical negligence claims in Ireland. Aoife Nally discusses a positive change in dispute resolution. Lord Woolf, in his final report on Access to Justice 1, identified a number of difficulties associated with the conduct of clinical negligence cases in England and Wales. These included the excessive disproportion between costs and damages, unacceptable delays and the intensity of suspicion and lack of co-operation between parties. Many practitioners in the field of healthcare law would agree that these problems are just as prevalent in Ireland today as they were in England and Wales in Civil Liability and Courts Act 2004 The main reform in recent years has been the introduction of the Civil Liability and Courts Act 2004 which was intended to give the procedures involved in taking a personal injuries case through the courts a radical facelift. Notwithstanding certain helpful procedural reforms contained in that Act, the consensus amongst practitioners is that it has failed to effectively remove the trial by ambush ethos in clinical negligence cases. Options for reform in Ireland Many of the perceived shortcomings in the running of clinical negligence cases can be attributed to such actions being commenced before they have been fully investigated and issues of causation, liability and quantum only being properly analysed after the institution of proceedings and the incurring of considerable costs. One of the main challenges to reform is to ensure that there is no extra burden on the judiciary. Lack of resources might prove an obstacle to other necessary reforms such as effective case management. The initial requirement therefore is for the implementation of a successful pre-action protocol. Woolf Reforms So what is to be recommended for Ireland? The introduction of the Civil Procedure Rules (CPR) in England and Wales in 1999 revolutionised the clinical negligence litigation landscape in that jurisdiction. The CPR provide for specific pre-action protocols for 12 different types of civil litigation, including clinical negligence cases. As with the CPR, the pre-action protocol requires the prospective plaintiff to set out in detail the background, salient facts and details of their case in a letter of claim before commencing proceedings. This is then answered by a similarly detailed letter of response from the potential defendant. To ensure that both sides are on an equal footing, each party must list the essential documents on which they intend to rely and provide copies of same if requested by the other side. Under the CPR the parties must consider using a form of alternative dispute resolution which is reasonable and proportionate. A formal written offer to settle can be made by either party at the pre-action stage. There are cost consequences if a party acts reasonably or unreasonably. In considering the experience England and Wales have had with the pre-action protocols introduced under the CPR, the leading text book on the matter noted the protocols have been a success without a doubt and in 2009 found that litigation post CPR had reduced by 80% in the High Court and 25% in the Circuit Court 2. Pre-action protocols workable in Ireland? Given that the pre-action protocols implemented in England and Wales have been largely successful, a protocol for use in clinical negligence cases in Ireland could be broadly similar. At the outset, such a protocol should ensure that all relevant records are available to both sides so that the parties are on equal terms. A request for medical records could be accompanied by a clear intimation that legal action is contemplated and this would signal the commencement of investigations. It is possible that a number of prospective claims might be resolved to the satisfaction of a potential plaintiff at this very early stage by way of an apology and explanation. If a similar system to the CPR was implemented, the next step would be the serving of a detailed letter of claim followed by the defendant s considered response. All of this information can be obtained without any involvement of the courts. As well as narrowing the issues, a pre-action protocol might also encourage dispute resolution before proceedings are issued. Currently there are no formal mechanisms for such early disposal. Litigation is sometimes unavoidable. If so, this front loading should facilitate earlier consideration of the issues in dispute, leading to speedier resolution of cases. To ensure that any protocol has teeth, sanctions for non-compliance must be stipulated. Adverse consequences in terms of orders at proceedings stage might ensure effective compliance. Conclusion The implementation of a pre-action protocol would herald a new and better litigation culture with emphasis on a co-operative, conciliatory approach where plaintiffs and defendants are on an equal footing from the outset. A pre-action protocol would equip solicitors with tools to enable dispute resolution before court proceedings issue. Any shift towards such a culture should be warmly welcomed. 1 Woolf Access to Justice Final Report, London HMSO (1996) 2 Civil Procedure (The White Book) London Sweet & Maxwell Embracing Reform

6 A comparative study: Case management in England and Wales Active case management ensures that litigation is pursued diligently and offers quicker and cheaper access to justice. The system in England and Wales could be a blueprint for reform in Ireland, says Stephen McGuinness. On 26 April 1999 the legal landscape changed in England and Wales with the implementation of the Woolf Reforms. The reforms were introduced with the purpose of encouraging early settlement of Court disputes. They were designed to improve access to justice by making proceedings quicker, cheaper and easier to understand. The reforms were introduced by way of the Civil Procedural Rules and it is accepted that they have been nothing short of a success. One of the most significant changes incorporated by the Civil Procedural Rules was that civil litigation would now be actively managed by the Courts to ensure that cases proceeded properly and in a timely manner. Case management was adopted to ensure that the parties identify the issues at an early stage and also to allow a fixed timetable to be established for the progression to trial. Many of the components making up the case management process in England and Wales will have been looked at for medical negligence cases in this jurisdiction by the Working Group on Medical Negligence and Periodic Payments (Working Group). The case management rules recommended by the Working Group are eagerly anticipated. Case management In England and Wales, following the service of the defendant s Defence both parties complete an Allocation Questionnaire for the court. This form confirms that both parties have considered settlement and alternative dispute resolution, such as mediation. It also names the experts being used by both parties and includes a proposed timetable for the progression to trial. Following completion of this form, if there is any dispute as to the proposed timetable and/or expert witnesses to be instructed, a case conference takes place with a Judge/Master. Normally, each party is only allowed to instruct one expert in each discipline. Furthermore, the Judge/ Master may order that a joint expert is instructed by the parties. Joint experts are often instructed in relation to quantum as opposed to liability. There is an argument that the onus on the parties to consider alternative dispute resolution is relatively soft, given that they merely have to tick a box to confirm that it has been considered. If a similar system were to be introduced in this jurisdiction there is scope for this duty to be extended. Furthermore, this is a duty that may more appropriately be dealt with earlier at the pre-action protocol stage. Exchange of witness statements The exchange of witness statements hugely contributes to helping both parties identify the issues at an early stage. In England and Wales witness statements are exchanged simultaneously shortly after the service of the Defence, depending on the timetable agreed. The lack of any rules governing exchange of witness statements in Ireland can cause huge difficulties for parties involved in civil litigation. For instance, in medical negligence cases, plaintiffs are faced with scenarios where they, and their experts, may not know the meaning or connotation of a medical practitioner s note and do not get an explanation for same until the evidence of that witness is given in court. For defendants, cases which turn distinctly on the facts can be difficult to predict when the version of events to be given by the plaintiff is not known until the plaintiff gives evidence. Exchange of witness statements in this jurisdiction would go some way to assisting both parties to identify the key issues and to assess the merits of their respective cases at an earlier stage. Expert meetings In England and Wales, following the exchange of expert reports, the experts of like disciplines from both sides have a meeting with no legal representatives present. An agenda for this meeting is agreed by the solicitors for both sides prior to the meeting. Following the meeting the experts prepare a joint statement highlighting the issues which they agree upon and those which they do not agree upon. This not only helps bring to the fore the main issues in dispute at an early stage, it also reduces court time when a matter is at hearing. Again, the introduction of a similar mechanism in this jurisdiction would assist parties in identifying the weaknesses and strengths of their case at an early stage and would encourage early settlement where appropriate. Of note however, this would increase the duties performed by an expert witness and would increase the workload of experts engaged in medico-legal work. Instructing solicitors would also have to consider how their expert would perform in an expert meeting, something they would not have had to consider previously. Pre-trial checklist While a window period of when the trial is to be heard is given at the initial case conference, a hearing date is not actually given until the pre-trial checklist is completed. This checklist confirms that the directions order from the initial case conference has been complied with. It also considers the likely length of the trial and what reports have been agreed. If such a checklist were to be adopted in this jurisdiction there is scope to extend its remit to include more details as to what remains in dispute between the parties. This would help as an aide for the Judges and would allow for a speedier hearing. 6 Embracing Reform

7 Case Management in England & Wales for Multi-Track Claims MUST BE SERVED WITHIN 4 MONTHS CLAIM FORM & PARTICULARS OF CLAIM SERVED COURT SERVES ALLOCATION QUESTIONNAIRE PARTIES RETURN ALLOCATION QUESTIONNAIRE DISCLOSURE OF DOCUMENTS CLAIM FORM ISSUED 14 DAYS CASE MANAGEMENT CONFERENCE SIMULTANEOUS EXCHANGE OF WITNESS STATEMENTS DEFENDANT SERVES ACKNOWLEDGEMENT OF SERVICE 28 DAYS (AN AGREED EXTENSION OF 3 MONTHS IS NORMAL) DEFENCE SIMULTANEOUS EXCHANGE OF LIABILITY REPORTS Enforcement of rules One of the biggest achievements of case management in England and Wales is that it gives parties quicker and easier access to the courts when the other party is defaulting. This is in great contrast to the issuing of a Motion and obtaining a hearing date in this jurisdiction. In England and Wales one merely completes an Application Notice. This is a simple form, which uses simple English and does not require the swearing of an affidavit. This form is sent into court and a meeting with both parties and the Judge/Master is arranged promptly. Often this meeting can be done by way of a telephone conference. Tough rules and sanctions give the courts stringent powers to enforce the Civil Procedural Rules in England and Wales to ensure that litigation is pursed diligently. The two main sanctions include an adverse award of costs and an order for a case or part of a case to be struck out. Similar sanctions would have to be adopted in this jurisdiction if case management were to be effective. Overall, the success of the Civil Procedural Rules in England and Wales highlights some of the deficiencies in the conduct of civil litigation in this jurisdiction. However, it also offers a helpful blueprint for reform. The adoption of some of these mechanisms into this jurisdiction would undoubtedly improve the landscape for medical negligence claims, creating quicker and speedier access to justice for both plaintiffs and defendants. COURT SENDS OUT LISTING QUESTIONNAIRE DEFENDANT SERVES COUNTER SCHEDULE AND QUANTUM REPORTS CLAIMANT SERVES SCHEDULE OF LOSS AND QUANTUM REPORTS Stephen McGuinness / Associate smcguinness@hayes-solicitors.ie PRE-TRIAL REVIEW HEARING DATE Embracing Reform

8 Open disclosure national policy and guidelines In a welcome development for both patients and hospital staff, the Health Service Executive (HSE) together with the Clinical Indemnity Scheme launched a national policy and national guidelines on open disclosure in November Kevin Dunne outlines the issues. The quality of work carried out including pilot projects and interviews is clearly reflected in the final publications. 1 The key objectives of these guidelines are to establish a standardised approach between healthcare professionals and patients in relation to the communication of information following an adverse event and to ensure that communication with patients occurs in a supportive and timely manner. Open disclosure is described as An open, consistent approach to communicating with patients when things go wrong in healthcare. This includes expressing regret for what has happened, keeping the patient informed, providing feedback on investigations and the steps taken to prevent a recurrence of the adverse event. An adverse event is an incident which results in harm to a person that may or may not be the result of an error. The Medical Council s Guide to Professional Conduct and Ethics for Registered Medical Practitioners obliges doctors to disclose adverse events to patients. However doctors are often reluctant to engage in this type of communication with patients for fear of attracting litigation. This is specifically addressed in the new documents, with numerous excellent examples and advice in relation to the process of engaging in open disclosure. An apology for example is described as A genuine expression of being sorry for what has happened. It is an expression of regret. It is not, nor intended to be an admission of liability. The HSE and the Clinical Indemnity Scheme recognise that adverse events affecting a patient are also very distressing for the doctor or nurse involved in that patient s care and - they have reiterated the importance of providing an environment in which staff feel supported in the identification and reporting of adverse events. The HSE will also provide and facilitate training. Importantly, the State Claims Agency and the Medical Protection Society fully support open disclosure and the launch of the National Policy and National Guidelines. There is currently no protective legislation to assist the open disclosure process. Legislation is expected in the upcoming Health Information Bill in relation to this process and it has been recommended that a statutory provision be considered which would allow medical practitioners to make an apology and explanation without these being construed as an admission of liability in a medical negligence claim. Recently the Minister for Justice, Alan Shatter confirmed that the Government was working on open disclosure legislation which would allow medical professionals to inform patients and their families of medical incidents that have caused harm. Furthermore, the Minister noted that if hospitals were to investigate an incident and to admit liability quickly once medical negligence had been established, such reform would be much more beneficial to families. The Minister said that this course of action would also reduce legal costs and provide savings to the taxpayer. Both the Minister for Justice and the Minister for Health James Reilly renewed their commitment to open disclosure law following the Portlaoise Hospital baby deaths reported on in recent months. In summary, even in the absence of legislation seeking to provide legal protection/privilege for the open disclosure process doctors are reminded that expressing regret for a patient s experience is not, nor is it intended to be an admission of liability. Issues of liability or blame should not be projected or accepted unless this has been investigated and agreed to in advance. It is worth noting the World Health Organisation s views: Disclosure is not about blame, either apportioning blame or accepting blame. It is about integrity and being truly professional. Accepting responsibility and embracing accountability are part of that professionalism. Kevin Dunne / Partner kdunne@hayes-solicitors.ie 1 Documents available at 8 Embracing Reform

9 The Medical Council recent developments Terence Moran offers an overview of the regulatory agenda for Ireland s medical doctors. Indemnity cover proposed legislation At present, the Medical Council s Guide to Professional Conduct and Ethics provides, in paragraph 50.1, that You must ensure that you hold adequate professional indemnity cover for all healthcare services you provide. This principle is the subject of the slow passage of the Government s Bill to provide for mandatory professional indemnity cover for doctors. The Bill is currently the subject of dialogue with the various indemnifiers. The Bill as currently drafted provides that the Medical Council shall make rules requiring a medical practitioner to hold professional indemnity cover for any claims arising from practice, including where a claim arises after the practitioner has retired. There is a specific exemption for practitioners working exclusively within the scope of the Clinical Indemnity Scheme run by the State Claims Agency. Under the terms of the proposed legislation, the Medical Council specifies the recognised indemnity providers who may provide such cover. The Bill makes it an offence to practise without adequate cover. A person found guilty on summary conviction faces a fine of up to 5,000 and/or 6 months imprisonment. If convicted on indictment, the fine is up to 130,000 and/or 5 years imprisonment for a first offence, the figures for a subsequent offence being 320,000 and ten years. While the Bill deals only with indemnity cover against claims, it is worth bearing in mind that while a practitioner may feel himself/herself adequately covered by virtue of the Clinical Indemnity Scheme, thought should be given to taking out supplementary cover provided by defence bodies such as the Medical Protection Society to guard against the cost of legal representation before the Medical Council, Inquests and other inquiries. The Corbally Judgment The most significant decision recently handed down by the High Court is Corbally v The Medical Council and others where judgment was given by Mr Justice Kearns in November In this case, the President of the High Court analysed the meaning of poor professional performance in the context of a hearing before the Fitness to Practise Committee. This possible finding against a practitioner was introduced by the Medical Practitioners Act 2007 which defined it as a failure by the practitioner to meet the standards of competence (whether in knowledge and skill or the application of knowledge and skill or both) that can reasonably be expected of medical practitioners practising medicine of the kind practised by the practitioner. It complemented the existing finding of Professional Misconduct which connoted a serious falling short of expected standards. Mr Justice Kearns judgment considers in detail the issue of poor professional performance in the context of a single or isolated error, rather than a series of incidents. He concluded that, as in the case of Professor Corbally, for such a finding to be made against him by the Fitness to Practise Committee, it must be very serious. In doing this, the judge introduced a causative element requiring that the consequences of the alleged act or omission must be taken into account when deciding whether the components of the offence are established. Medical Council strategy and outlook The Medical Council recently launched its Statement of Strategy setting out a number of strategic objectives covering such matters as development of an effective and efficient register, developing a proportionate and targeted approach to regulatory activities and developing a sustainable and highperforming organisation. At the same time the Council published the result of a major survey, Talking about Good Professional Practice. One of the headline results of this survey was the apparent reluctance amongst practitioners to report or take other action regarding an apparently impaired or incompetent colleague. While the Annual Report of the Council for 2013 is awaited, it is worth reminding ourselves of the statistics contained in the previous reports. This shows that in the period 2010 to 2012 there has been a year-on-year increase in the number of complaints made against doctors 384 in 2010, 433 in 2011 and 494 in There seems little reason to believe that this trend will not continue. Terence Moran / Partner tmoran@hayes-solicitors.ie Embracing Reform

10 Partnership agreements David Phelan and Sabrina Burke outline what a partnership is, and how they operate in practice. There are many situations in which a doctor may consciously enter into a partnership. For example, where one or more GPs carry on business together, it is often by way of partnership. But many situations arise where doctors share overheads and administrative duties in relation to specific projects for reasons of efficiencies. It is important to understand that when you are working with colleagues in this sort of way, you may be deemed to be in a legal partnership together. Definition of partnership The concept of partnership was first defined in the Partnership Act 1890 (which is still in force) and which states: Partnership is the relation which subsists between persons carrying on a business in common with a view of profit. Essentially therefore, any time two or more people carry on business together with a view to making a profit and without forming a company, a partnership exists. To that extent, it is the default form of business model for businesses involving more than one owner. A partnership relationship, where you carry on business with your colleagues with a view to profit, is fundamentally different from your legal relationship with the hospital you are working in, where for set fees you provide a particular service. It is important to understand that you may be deemed by a court to be in a partnership, even if you think you are not in one and/or do not wish to be in one. If it is the case that you do not wish to be considered to be in partnership, then it is important that your view is supported by the practical arrangements that you have in place with your colleagues and is explicitly expressed in any written agreements that record the terms of the arrangement. However you should be aware that the question of whether a partnership exists or not is a question of fact which a Court would decide based on all the facts before it. The parties intention alone will not be decisive. Nature of partnership It is crucial to understand the nature of a partnership. The following are just some of the important characteristics of being in a partnership: Each partner is a co-owner in the business, and is liable for the debts of the partnership without limit. Therefore a partner is liable for the losses caused by his co-partners. Equally, unless implied otherwise, partners will share in the profits of the business equally, notwithstanding that partners may have a different level of input. Partnerships have no separate legal personality; therefore the partners can be sued in their own names and likewise, if they wish to take a claim, must take it in their own name. A partner s personal assets are not ring-fenced from a claim against the partnership. Need for written partnership agreement The law in this area dates back to the Partnership Act This Act implies certain terms into partnership agreements, unless the partners have agreed otherwise in writing. Therefore, if a partnership is deemed to be in existence and there is no written agreement in place, the implied terms of the 1890 Act will apply. This is not an advisable state of affairs as many of the terms of the 1890 Act are not suitable in a modern day context. For example, under the 1890 Act: Any one partner may dissolve the partnership unilaterally without reason. There is no right to expel a partner. Thus no matter how unprofessional a partner may be in the running of a practice, in the absence of a written partnership agreement providing for expulsion, the only option would be to dissolve the partnership entirely. There is no power for a partner to retire and if a partner dies, the partnership will automatically dissolve. To avoid the rights and restrictions of the 1890 Act being implied into your relationship with your partners, it is essential to have a written partnership agreement in place. If you are either about to enter into partnership with others, or are already carrying on business with others but without a written partnership agreement, it is advisable to arrange to have a written agreement put in place as soon as possible. Discuss between yourselves at the outset what you see as the key issues and having done that, arrange to consult a solicitor who will take that information and assist with the drawing up of an appropriate partnership agreement. Likely key issues will be division of profits and losses, the responsibility for the management of the practice between the partners, annual leave, payment of tax and expenses, grounds for expulsion of a partner and voluntary exit mechanisms for partners. Partnership property Issues regarding what is or is not partnership property can often arise. It is important at the outset to decide and make clear which property is partnership property and which property instead belongs to individual partners. The 1890 Act presumes that property used in the partnership is partnership property and that property bought with partnership funds is partnership property. A distinction must be drawn between partnership property and property that happens to be owned by the parties to the partnership and from which 10 Embracing Reform

11 the partnership does business. If it is not intended that premises become a partnership asset, then this needs to be clearly documented. This is important to ensure that the asset, or a share in it, can, for example, be passed on to family members on death, or be used as a source of income following departure from the partnership. So as to avoid any doubt on the matter, we recommend that in addition to the partnership agreement, the property owners would have a co-ownership agreement that would deal solely with the ownership and management of the property. We also recommend that the owners of the property enter into a lease arrangement with the partnership so that an income can be derived from the asset and so that the responsibilities and liabilities in relation to the property can be passed on to the partnership for the period of the lease. Structure of Partnership The model of how a partnership operates in practice has been refined in many professions, particularly amongst solicitors and accountants. For larger partnerships for example, a two tiered partnership structure can sometimes be seen. The first tier partner is a full equity partner one of the owners of the business who shares in the profits and losses and obligations and entitlements with the other equity partners. The second tier is a salaried partner. That term is in fact something of a contradiction in terms since a salaried partner is not usually a partner but is an employee of the practice, entitled to all the benefits and rights which employees are entitled to under Irish employment legislation. A salaried partner is held out externally as a partner but receives a set salary like other employees and will have limited rights, for example he or she is unlikely to have a right to vote at partners meetings, to dissolve the practice or to be involved in other significant decisions of the firm. Similar partnership models or particular aspects of such models could equally be used in medical practices of sufficient size. Again, in putting place any such models, or in accepting a salaried partner position, it is important that employment law advice is sought to ensure that the parties intentions are correctly reflected in a written agreement. Conclusion The key issue is to avoid uncertainty in the legal relationships you have with your partners. Taking the trouble to put a partnership agreement in place to regulate the relationships you have with your partners can save a huge amount of time and hassle for you at a later stage. We are happy to advise you on an appropriate partnership agreement which will reflect the specific circumstances of your own partnership. David Phelan / Partner dphelan@hayes-solicitors.ie Sabrina Burke / Associate sburke@hayes-solicitors.ie Driven by knowledge and experience Hayes healthcare team has established a reputation as the preeminent provider of healthcare legal services to public and private sector clients. We maintain and enjoy longlasting client relationships. We have 16 solicitors, including 8 partners, plus three legal executives dedicated to medical and dental defence litigation. This makes us the largest Healthcare team in the country dedicated to identifying and meeting the needs of our clients in the everchanging landscape of healthcare services. Due to our specialised involvement in healthcare services across the spectrum of clinical practice, our team has acquired specific and unique skills in managing clinical negligence claims, Inquests, Dental Council complaints and disciplinary hearings, Tribunal hearings, dento-legal and ethical issues and contractual / employment matters. Our long tradition of advising Dental Protection and the Medical Protection Society dates back more than 50 years. We were appointed as panel solicitors to the Clinical Indemnity Scheme from the introduction of the scheme in We are proud of our work in the healthcare services area and will continue to provide a highly professional and valued service to clients. Embracing Reform

12 EMBRACING REFORM The New Landscape in Clinical Negligence Litigation A major half-day conference organised by Hayes solicitors May 2014 PROGRAMME 1:00 P.M Registration and Light Lunch 2:00 P.M Opening Address David Phelan, Managing Partner, Hayes solicitors 2:10 P.M Setting the Scene Ms Justice Mary Irvine, High Court Judge and Chairperson of the Working Group on Medical Negligence and Periodic Payments 2:20 P.M Keynote Address Mr Justice John Quirke, President of the Law Reform Commission and the First Chairman of the Working Group on Medical Negligence and Periodic Payments 2:40 P.M The Need for Reform Ciarán O Rorke, Partner and Head of Healthcare, Hayes solicitors 3:00 P.M Observations from the English Experience Ms Helen Vernon, Director of Claims, National Health Service Litigation Authority 3:20 P.M Coffee 3:45 P.M Managing Costs Towards a Fairer System Ciarán Breen, Director, Clinical Indemnity Scheme, State Claims Agency 4:10 P.M A Tale of Two Jurisdictions The Practitioner s Perspective Emma Hallinan, Director of Claims & Litigation, Medical Protection Society 4:30 P.M The Patient s Perspective Lisa Jordan, Partner, Irwin Mitchell, Solicitors, Birmingham, England 4:50 P.M Panel Discussion, Questions & Answers and Closing Remarks 5:15 P.M Conference Ends, Light Refreshments CPD certificates will be issued by following the event. Lavery House Earlsfort Terrace Dublin 2 Ireland Tel: Fax: law@hayes-solicitors.ie