Hospital Liability in Malaysia
CONSULTANTS PRACTISING MEDICINE IN PRIVATE HOSPITALS HAVE GENERALLY BEEN REGARDED AS INDEPENDENT CONTRACTORS. THEIR AGREEMENTS WITH THE PRIVATE HOSPITALS USUALLY REVEAL A CONTRACT WHERE PRACTISING RIGHTS AND PRIVILEGES ARE GRANTED BY THE HOSPITAL TO THE C
It is not one of employeremployee. As a result, legally, private hospitals did not generally regard themselves as being responsible for any negligent act of these independent contractors. The consultants would usually purchase their own indemnity to cover any claim of negligence made against them in the course of their medical practice.
The evolution of the principles of vicarious liability by the Supreme Court of the United Kingdom in Welfare Society and others  2 AC 1 and the adoption of the principles of non-delegable duty expounded in another Supreme Court decision by Lord Sumption in Woodland v Swimming Teachers Association and others  AC 537 have resulted in judicial pronouncement that challenges this longstanding understanding.
In two recent Malaysian Court of Appeal decisions, two different private hospitals were found liable for the neglect of the consultants practising within their premises. The premise of the finding of liability was that the private hospitals concerned were vicariously liable and owed a non-delegable duty of care to patients.
UK CASE STUDY
“The law of vicarious liability is on the essentially a common law concept that attaches liability on an employer for the negligent act of its employee that occurs in the course of the employee’s employment. Court applied a two-stage test. First, it extended the concept to those that are akin to an employer-employee relationship. In so doing, the Court took into account five criteria namely:
(i) the ability to compensate: whether the employer was more likely to have the means to compensate the victim than the employee and can be expected to have insured against the liability;
(ii) whether the tort was committed as a result of activity being carried out by the employee on behalf of the employer;
(iii) whether the employee’s activity was more likely to be part of the business activity of the employer;
(iv) whether the employer created the risk of the tort committed by the employee by employing him/her to carry on the activity; and
(v) whether the employee, to a greater or lesser extent, will have been under the control of the employer. Second, the Court examined if there was a sufficiently close connection between the employment and the tortious acts such that it would be fair, just and reasonable to hold the defendant liable.
In 2014, Woodland was decided. This case clarified when a nondelegable duty of care would arise. A non-delegable duty of care essentially means that there is a primary duty on the part of one party that cannot be delegated to another. In Woodland, the Supreme Court identified five defining features. These are whether:
(i) the claimant is a patient or a child, or some otherwise vulnerable or dependent person;
(ii) an antecedent relationship exists between the claimant and the defendant, which puts the claimant in the care of the defendant and from which it is possible to assign to the defendant a positive obligation actively to protect the claimant from harm;
(iii) the claimant has no control over the defendant’s performance of those obligations;
(iv) the defendant has delegated some part of its function to a third party, who has assumed some custody or care of and thus also some degree of control over the defendant; and
(v) the third party has been negligent in the exercise of that delegated function. Woodland were cases that involved private hospitals. The legal principles developed in these two important cases in the UK have however been discussed and argued in cases involving hospital liability in Malaysia.
THE MALAYSIAN APPROACH
At the end of 2016, the Court of Appeal decided on the case of Soo Cheng Lin v Dr Kok Choong Seng & Anor  1 MLJ 521 and in 2017, a different bench of the Court of Appeal handed down David & 2 Ors v Dr S. Hari Rajah & Anor 10/2015, 29th March 2017).
At the time this article was written, Soo’s appeal to the Federal Court had been argued and was pending decision.
Soo is a patient who underwent surgery to remove a lump in his left forearm. It was alleged the medical practitioner,
The premise of the finding of liability was that the private hospitals concerned were vicariously liable and owed a non-delegable duty of care to patients.
who performed the surgery, had removed part of the patient’s left median nerve that required the patient to undergo a second surgery.
Although there was an express clause in the agreement between the hospital and the medical practitioner that the latter was an independent contractor, the High Court held that the hospital was vicariously liable for the medical practitioner’s negligence and was in breach of a non-delegable duty of care.
The Court of Appeal dismissed the hospital’s appeal and affirmed the High Court’s decision.
a medical practitioner’s negligence in failing to properly examine and treat a patient, who was admitted with complaints of diarrhoea, vomiting and severe lower abdominal pain of a twoday duration. Initially a laparotomy and appendectomy were performed on the patient. However, the patient was soon re-admitted with the same complaints and was diagnosed with paralytic ileus.
Unfortunately, the patient’s condition worsened and he eventually passed away due to septicaemia acute appendicitis peritonitis. The High Court allowed the claim against the medical practitioner but dismissed the claim against the hospital. The patient’s appeal was in respect of this dismissal. The Court of Appeal allowed the patient’s appeal and held that the hospital was both vicariously liable and was in breach of a non-delegable duty of care.
MATERIAL ISSUES CONSIDERED BY THE COURT “INDEPENDENCE” OF THE DOCTOR
vicarious liability of a hospital was to be determined by investigating and evaluating whether the tortfeasor(s) were “truly independent contractors or they [were], for all intents and purposes, still employees or in special relationships with the hospital”.
Following consideration of the terms of the contract between the hospital and the medical practitioner, the Court concluded that the hospital remained in control of the latter.
According to the contract, it was mandatory for the medical practitioner to treat, manage and care for the patient at the hospital; to recommend the hospital’s pharmacy to his patients; to inform the medical director before enjoying his entitlement to 30 days leave; and the profits and risks were to be shared between him and the hospital.
Any non-compliance with these terms meant that the medical practitioner was in breach of the contract, entitling the hospital to terminate the contract. In view of the foregoing, the Court held that the medical practitioner was “not truly independent” but was in “quite a special relationship” with the hospital, and was “in fact very much part and parcel” of the hospital.
ASSUMPTION OF POSITIVE DUTY
In Soo's case, the Court held that private hospitals “by its nature of existence as a healthcare provider” for a fee, owed a non-delegable duty of care to a patient, who also became a patient of the hospital when he/she was admitted. Moreover, the patient was “vulnerable and dependent on the protection of the [hospital] against the risk of injury”.
reasoning and concluded that “..by admitting [the patient] through the doors and into its facility…[the hospital] had assumed a positive duty of care to protect [the patient] from harm and the risk of injury”.
As there is an appeal still pending decision in the Federal Court, it would not be appropriate to discuss the impact or the merits of the Court of Appeal’s decisions at this stage.
As it stands, the Court of Appeal in Soo's case attempted to address any chilling effects its decision may have on the healthcare industry with the following passage:
“…we say that it can be easily solved by displaying visible signage in prominent places in the hospital saying that the hospital will not be liable for the negligence of its doctors. Or alternatively ensure that a disclaimer clause relating to the negligence of its doctors is part of the conditions in the admission forms signed by patients.”
In view of the foregoing, the Court held that the medical practitioner was “not truly independent” but was in “quite a special relationship” with the hospital, and was “in fact very much part and parcel” of the hospital.