In the medical malpractice market, institutional and individual health care providers face unique long-tail liabilities.
One of the foundations of long-tail liabilities is the duty of care held by these insured parties to their patients, which often does not have a clear endpoint. It can be many years before the harm to a patient crystallises, and years more before a claim is made.
This challenging situation is compounded by courts’ decisions, in recent years, to grant extensions of time for plaintiffs to issue proceedings.
DUTY OF CARE ISSUES
When a patient seeks advice or treatment from a provider, the provider generally assumes a duty of care. This duty is “discharged” only when the provider has taken the reasonable care that the duty requires.
There is no hard-and-fast rule about when a duty is discharged and it can be difficult for a provider to prove that this was done. A provider might wish to show there was:
- Reasonable evidence to infer that the condition had been successfully treated;
- A reasonable referral of the patient to another provider;
- Reasonable advice to the patient to take certain steps;
- The patient rejecting reasonable advice of any sort.
The question is not whether the provider’s conduct was effective, for example whether the patient actually re-attended for further treatment, but whether it was reasonable.
The Courts accept that patients are assumed to be autonomous and therefore have the right to accept or reject advice and treatment. As the NSW Court of Appeal commented in O’Brien v Wheeler  NSWCA 236, the case law:
‘‘... reflects the autonomy of the adult patient, who is regarded as having the right (if properly informed) to decide for himself or herself ... An adult patient who is in a position to make a choice has the right to elect a surgical procedure which the hypothetical ‘reasonable’ person in his or her shoes would avoid, and to refuse a procedure which the hypothetical ‘reasonable’ person in his or her shoes would embrace.”
ALMARIO V VARIPATIS  NSWCA 76
In this case, a plaintiff sued his general practitioner in 2012, claiming he ought to have been referred to a bariatric surgeon for advice on weight loss surgery at some point between 1997 and 2003. He had not been given this referral and had not lost weight, and had subsequently developed complications of his obesity including cirrhosis of the liver.
Relevantly, the plaintiff had failed to act on a previous referral to an obesity clinic and had failed to act on the advice of another doctor to lose weight.
The plaintiff established liability at first instance, and the general practitioner (GP) appealed. The NSW Court of Appeal found that the plaintiff had failed to establish that he would have accepted a referral to an obesity clinic or lost weight if he had. The Court commented:
“If the plaintiff refused to take the firm advice of his general practitioner, and of experts to whom he had been referred, there was no breach of duty on the part of a general practitioner in failing to write a further referral. The duty of care stopped short of requiring an exercise in futility.”
The patient applied to the High Court for special leave to appeal the decision, but it was refused.
GRINHAM V TABRO MEATS PTY LTD & ANOR  VSC 491
The patient attended his GP clinic for immunisation against the Q fever virus in 2002. The GP correctly told the patient that, given the results of certain preliminary testing, he could not be vaccinated at that time. She provided the patient with a referral for further testing and asked that he re-attend her in one month’s time.
The patient did not take the further test, or re-attend, and the GP took no steps to follow up. Four years later, in 2006, the patient contracted the Q fever virus, which would have been avoided had he been vaccinated. The patient issued proceedings against his employer in 2010. The employer then brought a third party proceeding against the GP.
The Court commented that the GP’s duty of care did not cease when the patient left the clinic after the consultation. It said there was an ongoing doctor/patient relationship with a continuing duty until, at least, the time the patient should have re-attended the clinic.
The Court needed to determine whether it was reasonable for the GP to not have taken the further step of recalling the patient when he failed to re-attend. Significantly, the Court commented that:
‘‘...the question of advice and recall cannot be determined on a generic basis, it must be context specific: all the circumstances must be considered such as the patient’s symptoms (if any), presentation, potential risk, comprehension of the advice and history of compliance.”
The Court found that the GP had acted reasonably in the circumstances. It said that the patient understood the advice provided by the GP, including the risk he faced and the need to undergo further testing and re-attend. It was his decision not to do so and the GP had no reason to believe that he would not follow her advice.
LIMITATION PERIOD ISSUES
Australia’s tort reforms, in around 2003, introduced shorter limitation periods for personal injury claims. The statutes vary from state to state.
The trade-off is that, in these claims, the time for a potential plaintiff to bring a claim begins to run from the date he or she knew, or should have known, that injury, loss or death was caused by the defendant, or by some fault on the defendant’s part. If the potential plaintiff still exceeds the limitation period, courts generally have the ability to extend the period.
We are seeing a trend with courts becoming more lenient in their interpretation of when the period begins, and in granting extensions.
AME HOSPITALS PTY LTD V DIXON  WASCA 63
The allegations related to the plaintiff’s birth in 2001. The plaintiff suffered cerebral palsy. His father engaged lawyers to advise in relation to the birth. An expert report was commissioned, which found that the care given had been appropriate. The expert did not comment on the cause of the cerebral palsy (and was not asked to do so).
A limitation period began to run in 2005 on the passage of new legislation. This period expired in 2011. In May 2012, the father instructed lawyers to obtain another expert report. This new expert report was critical of the care given in 2001, and said that the birth had led to hypoxic ischaemic encephalopathy (HIE), which in turn had caused cerebral palsy.
The father sought an extension of time. The relevant legislation turned on the plaintiff (or those bringing the litigation on his/her behalf) knowing that he/she had suffered “injury” and knowing of the “physical cause” of this injury. The father argued that the HIE (rather than the resultant cerebral palsy) was the “injury” or alternatively the “physical cause” of injury.
At first instance, the Master hearing the application agreed. He found that the HIE was the injury and that the father had not known about this, or the causative process, until the second report was received.
The WA Court of Appeal upheld this decision. An application for special leave to appeal the decision to the High Court was unsuccessful.
JONES & ORS V LU & ORS (UNREPORTED, COUNTY COURT OF VICTORIA, WISCHUSEN J, 10 MARCH 2015)
In this case, the plaintiff’s wife was treated by the defendants in 2001 and 2002. She died in 2003 from breast cancer, and the gist of the claim was that there had been a missed opportunity to diagnose and treat this.
The plaintiff had approached lawyers well before the relevant limitation period expired (in 2006). The Victorian County Court found that inactivity by the plaintiff’s solicitors had led to proceedings not being issued by 2006. Ultimately, these proceedings were not issued until 2012.
The plaintiff argued that he had not formed a view, for some time, that his wife’s death was the fault of some or all of the medical practitioners involved. The Court did not accept this, and found he had formed the requisite belief prior to the 2003 death.
However, the Court granted the plaintiff an extension, despite the proceedings being brought nearly nine years after the cause of action accrued, an “undoubtedly great” delay. In support of this, the Court found that the delay had not caused any significant prejudice to the defendants. The Court was unwilling to find that the plaintiff could have proceeded against his solicitors instead.
Insurers understand that the continuing nature of a provider’s duty of care may often result in a long-tail liability. This has not been made any easier by the courts seemingly becoming more lenient in granting extensions of time.
This does not mean, however, that the Australian medical malpractice market is a high-risk one, and indeed there appears to be a stable claims environment at this time.