No fault medical compensation an impossible dream?

Im from the Government, and Im here to help you.

Victims of medical negligence have every reason to react cynically to promises of assistance, given the track records of many Australian governments over the last few years.

Reforms thus far have been remarkably consistent they have reduced compensation for victims, even with the most appalling treatment errors. The well regarded torts scholar Professor Luntz for example, made reference to hypocrisy of claiming that the Health Care Liability Act1 preserved full compensation for those with serious injuries2. Undeniably it did not.

Strikingly similar results from multiple studies, confirming unpalatable levels of avoidable errors have shifted the focus of the lobbying. No longer is it stridently asserted that the Courts expect unreasonable standards of doctors; rather it is said that a fault based compensation system is unhelpful, as it discourages admission of errors which may facilitate system improvement.

Faced with the obvious problem of how to provide for the victims, many in the medical profession call for introduction of a no fault scheme, so that all injured patients have access to compensation. But is this feasible?

Health Care Liability Act NSW 2001 predated the Civil Liability Act NSW 2002.

On one view, Australia already has a no fault system. It is called the Department of Social Security, and funds wage loss by the disability support pension, and care costs by the carers pension. The treatment side of the equation is met by the public health system. Admittedly, compensation for pain, suffering and emotional distress is missing. But the scheme is there but it is not very generous. Proponents of no fault compensation often point to the New Zealand scheme3 (NZ ACC). But for medical misadventure, the New Zealand scheme is not no fault. 1992 changes saw the introduction of a negligence test4, for benefits to be payable. Those changes persisted through the later amendments in 1998 & 2001, in what has been described as an oddity in a scheme essentially based on no fault cover5.

The NZ medical profession may initially have greeted inclusion under the NZ ACC. No doubt their insurers were pleased at a situation which might have been seen as the best of both worlds a negligence gateway followed by the more modest payment structure which usually characterizes no fault schemes.

However, patients soon started to seek compensation via claims for punitive damages6 and disciplinary proceedings quadrupled in the first 15 years of the scheme7.

Professor H Luntz, The Australian Picture Victoria University of Wellington Law Review, Volume 35 Number 4 December 2004 at page 890. 3 The New Zealand scheme grew from the Compensation for Royal Commission for Personal Injury in New Zealand, Report of the Royal Commission of Inquiry (Woodhouse Report) 1967, implemented by the Accident Compensation Amendment Act 1974 which incorporated reference to medical, surgical, dental or first aid misadventure in section 2. 4 Accident Rehabilitation and Compensation Insurance Act 1992, section 29 provided a definition of medical error as the failure of a medical health professional to observe a standard of care and skill reasonably to be expected in the circumstances. 5 At page 816,Petra Butler, Brief introduction to Medical Misadventure; Victoria University of Wellington Law Review, Volume 35 Number 4 December 2004 6 Which in Australia are not covered by medical defence insurers. 7 Butler, op cit, at page 816- 817.

In England, a 2001 report called Making Amends the Chief Medical Officer flagged a Redress Scheme, including a no fault compensation scheme for cerebral palsy and similar conditions. Just recently in the Queens Speech8, an announcement was made for the implementation of such a scheme. Yet within a matter of days, the NHS Redress Scheme for Severely Neurologically Impaired Babies was quietly dropped from the draft legislation9.

Where does that leave us? With little in the way of viable no fault schemes to point to, for adverse medical outcomes.

The concept of no fault compensation is undeniably attractive. But even the current social security income support, with some 700,000 pension recipients, appears breathtakingly expensive.

So, the question must be asked, is the provision of adequate no fault compensation beyond reach?

Bill Madden May 2005

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May 2005. http://www.commonsleader.co.uk/output/Page990.asp