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

Insurance - - CONTENTS - Text Raja Eileen So­raya Raja Aman Part­ner, Messrs. Raja, Dar­ryl & Loh

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 [2013] 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 [2014] 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 [2017] 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”.

CON­CLU­SION

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.

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