Resolving the Once and For All Conundrum

A huge amount of costs arisein medical malpractice claims in dealing with and resolving the quantum of damages to be paid a deserving claimant.That is particularly so when the parties, for whatever reason have resorted to litigation, and a judgment and order is needed to resolve disputes. Because of the Once and For All rule in our law a claimant has only one bite at the cherry in claiming all damages flowing from the negligent damage causing conduct. So, a lot of time, effort and money is spent for example in a claim for the negligent causation of cerebral palsy in a baby in determining the longevity of the injured child and from that damages for future medical and hospital treatment, care and caregivers, special equipment, and loss of earnings.

Damages not claimed for in the litigation, cannot be claimed later. So, it is essential that any claim is carefully considered, quantified and justified. The consequence of this, and a lump sum award is that there may be over-or under-compensation. A court may for example determine longevity, following a costly and complex debate between experts, to be say 40 years. The injured child lives for 50 years One cannot return to the court and ask for damage for those extra 10 years. On the other hand, if the injured child dies aged 30 years the defendant cannot recover the 10 years’ worth of damages it paid. Over-and under-payments have a catastrophic effect on defendants and plaintiffs respectively –more so, where settlements are not disclosed to medical schemes (required by most of them under their application or membership rules) and an effective double-payment results when a medical scheme keeps paying for compensation already paid out to a plaintiff in cash.

Our law also doesnot require damages awarded and paid to be used for the purpose forwhich they were awarded. So,for example the successful claimant for damages to their motor vehicle does not have to use the damages awarded to repair or replace that motor vehicle.

An injured patient does not have to use the award for their ongoing treatment. Awards to injured patients often include costs for a specified number of medical interventions or treatments, for example physiotherapy, or psychiatric interventions, cost of special medical equipment and the maintenance and replacement of that equipment. There may also be awards for caregivers and adaptation of amotor vehicle and home. A successful plaintiff may, if they wish, take the award and use it for none of that. In the case of injured minors, whose parents sue for the damages on the minor’s behalf, that risk, and the risk that the parents squander their child’s benefits for their own benefit, is usually dealt with by the appointment of a trustee to administer the award in the best interests of the minor. The award then includes, and has those, additional administration costs.

So all in all in complex medical malpractice cases, such as cerebral palsy claims, significant costs are incurred directly by all parties, and indirectly in court time, in coming to a determination of a lump sum quantum of damages. And there are significant direct adverse financial consequences for the defendant against whom the lump sum award is made in having pay out a lump sum award which may never be put to the intended use by the claimant. Or as referred to above the longevity of the claimant is such that in effect there is an over-payment to the defendant’s detriment.Or an under-payment to the claimant’s detriment. There are potentially adverse financial consequences for all those directly involved. And from a greater societal perspective. A Professional Indemnity Provider, for example, who indemnifies the defendant on the given scenarios incur a cost which affects, even if indirectly, how it insures its risk base and at what cost. Those costs inevitably find their way to medical schemes and/or the public, who seek and pay for medical benefits or assistance from healthcare providers. If the claimant is a beneficiary under a medical scheme, they may only continue to claim benefits normally where they have in fact not recovered an adequate costs settlement through the lump sum damages award. That medical scheme then incurs costs it correctly should not have, which adversely affects the medical scheme’s member base and the Risk Equalisation Fund.

There have been attempts to have the courts develop our common law to avoid the requirement for a once and for damages award. Most recently in a matter involving the Gauteng Department of Health the Constitutional Court declined on the facts before it to do so but left the door open to do so. There are other matters pending which may have a different result. The Constitutional Court’s judgment suggests there may not be a principled resolution to the problem, but one which is fact based and dependant on the circumstance of eachclaimant and the financial position of the defendant. Intervention by the legislature is desirable to amend the law to provide for payments of damages in instalments for the actual application to which the award was intended and for the duration of the claimant’s life. That intervention is unlikely to be anytime soon.

Parties can of course always agree periodic payments, applied to a specific use for the duration of the claimant’s life and subject to appropriate financial security being provided (by insurers or reinsures, for example).

Natmed Medical Defence promotes and provides support and expertise in the early voluntary mediation (or pre-court mediation) and resolution of complex medical malpractice claims to avoid, or reduce, all the adverse financial consequences referred to above. Some cases may require judicial resolution. Many are however resolvable relatively early in their life and cost efficiently, especiallywith avoiding significant contingency fees (up to 25% of any settlement, that a claimant will not receive but goes to plaintiff attorney firms doing work at risk). Natmed provides access to an appropriate, and sometimes separate, panel of experts to resolve questions of liability and damages. Medical facilities and practitioners may provide for early voluntary mediation in their admission and contract documentation, with which we also assist. A Natmed convened committee of experts annually determines a tariff schedule condition-specific. The medical scheme of the claimant (where they are a member, or the provincial health authority if they are not) then administers payments under the tariff schedule to the claimants for costs incurred by the claimant for the lifetime of the claimant and related to the adverse condition claimed for and for which the defendant was agreed to be at fault. This avoids the need for long, emotionally taxing and costly disputes about longevityand future medical and hospital, and related costs and expenses. It avoids the medical scheme giving a duplicate indemnity when it should not, or a claim for services from a State medical facility for which the claimant has not been charged. Loss of earnings are paid each month and correlated with medical cost payments. Those payments are supported by way of an appropriate guarantee from the Professional Indemnity Provider, to the medical schemeor the State.

This solution isn’t perfect. Hard cases will always make hard law, or in this case for hard or impossible resolution. It is a mechanism in appropriate cases for a better resolution than currently available for those directly involved in the matter and society in general.

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Donald Dinnie
Group CEO
Natmed Medical Defence (Pty) Ltd
First published April 2018