The Deficiencies in Common Tort Law as Applicable to Medical Malpractice - Research Paper Example

 The issue of medical negligence is related to the law of tort and over the years, there has been phenomenal growth in tort litigation, particularly in the medical sector. The ideal aim of tort law as applied in medical litigation would be to affix liability for the costs due to medical injury and be such as to provide incentive for taking optimal care in preventing such medical injuries. Medical malpractice contributes to substantial economic costs and the affixing of responsibility on doctors or injurers for the costs of harm caused by medical negligence essentially seeks to find the right balance between social benefits due to medical care, the costs involved in taking adequate precaution against such medical injury and the costs of negligence ((Kessler & Rubinfeld, 2004). In practice, however, such an ideal effect is rarely achieved. The traditional negligence rule has been found to be deficient is several respects. The aim of tort laws relevant to medicine consists of providing compensation to victims of medical harm as also to prevent errors in medical practice (Kinney, 1995). The no-fault rule developed as a result of efforts to address the deficiencies in common tort law as applicable to medical malpractice. However, it needs some examination to assess the effectiveness of both negligence rule and no-fault regime when applied to medical practice. This paper examines the relative merits and demerits of negligence rule and no-fault regime as applicable to medical malpractice and arrives at some key factors that make the no-fault system better than traditional tort laws applied to medical malpractice incidents. The traditional system of tort law relies on three elements in arriving at recovery for the plaintiff; this includes harm, cause and breach of duty. For the victim’s case to be maintainable in law, therefore, he or she must have suffered some harm or injury, such injury or harm should have been caused by the injurer or defendant, and the action or failure in action by the defendant is deemed as breach of duty which the defendant owes to the plaintiff (Cooter & Ulen, 1999, p. 291). The effect of tort law is in internalizing certain externalities and such internalization uses the concept of liability to lower the effects of transaction coats. Cost internalization allows for the injurer to pay compensation to the victim and in turn, the potential for future harm can also be minimized by creating incentives for investing in safety (p. 290). However, the negligence rule does not preclude the injurer from claiming that he or she had taken due care or that the standard of care as applicable towards care for the victim had been fully satisfied (p.297). Indeed, efficiency of incentives is provided to both injurer and victim by the negligence rule because a legal care standard is enforced owing to the need to evade liability (p. 307). Tort law, therefore, allows for the victim to sue the injury causing agency, including physicians and health care institutions. However, the legal process under the traditional negligence based system of tort relies on harm actually being caused to the victim; the cause must also be the most proximate cause in order to establish legal liability. In “Economics” terms, the defendant has caused injury to the victim when the utility of the victim is lowered by the former by means of the control over variables affecting the latter (p. 295). Breach of duty may not always be required to establish defendant liability under tort law when strict liability alone-consisting of harm and proximate cause elements-can well establish such liability exists and legally compensable. However, it is the common rule under tort law to consider all three elements to establish legal liability. Essentially, therefore, the negligence rule and the intentional tort are the two types of liability affixation that rely on the three elements viz., harm, cause and breach of duty of which it is the former type that is compared to the no-fault regime in this paper. Under the common law system prevailing in European countries like Great Britain, the medical care giver or physician is expected to behave in a reasonable manner in discharging his duties towards the patient. The same also holds for agencies like hospitals and nursing homes. Thus a standard of care is established that serves as yardstick in assessing the actual level of care provided to the patient by the care giver. Negligence arises when liability due to below standard care is provided. Under a negligence rule, both injurer and injured derive incentive for liability. Where the injurer takes efficient precaution corresponding to the legal standard, accidental injury caused to the victim can be avoided by the injurer. This serves as incentive to the injurer to take efficient precautions against injury to the patient. However, this also means the victim will take efficient precaution in avoiding injury (Cooter & Ulen, 1999, pp. 307-308). Again, medical negligence actions often fail to meet expectations or needs of both plaintiff and defendant in various ways. The costs entailed are disproportionate and often exorbitant. Often the costs exceed the amount actually involved in damages to plaintiff. There is very often much delay before claims are resolved. Several cases that enter law courts are without merit, thereby entailing unnecessary costs and trouble to courts. The rate of success in litigation is much lower in medical negligence cases. Lack of cooperation between the parties to the litigation also hampers smooth proceedings during legal hearings (Lord Woolf, 1996). Cases involving medical negligence under the regular negligence based tort law system take as much as six years or more from issue of proceedings till the conclusion, often take even longer to be settled by the courts, most cases that reached the courts were legally aided, and some cases even were over ten years old, pending settlement (Otton, 1998). In addition to these anomalies, a negligence based medical liability system leads physicians to take insufficient precaution against injury to their patients, whereby the marginal economic benefits of precaution may exceed the marginal social costs (Kessler & McClellan, 1996), but it can also lead to doctors taking excessive precautions or practicing “defensive” medicine, such that the marginal social costs exceed the marginal benefits from precaution (Farber & White, 1991). However, the basic aim of medical malpractice liability regime is only to help redress the patients who are injured by accidental medical errors by doctors or care institutions, and all help provide physicians appropriate incentive to render efficient treatment and care to their patients (Bell, 1984). The basic system works by affixing responsibility on doctors who cause patient harm or adverse health outcomes and also penalizes them; the penalty charged to errant doctors are then utilized to compensate the injured patients (Danzon, 1985). The landmark Harvard Medical Practice Study by a group of eminent experts in 1990 also found that the number of patients getting injured by errant physicians was much more than the number of injured patients who received legal compensation through the negligence regime. One other effect of negligence cases is also that more doctors rely on costly insurance fro precaution against future medical malpractice liability cases, which may include benefits for them that are non-financial in nature, like protection of their reputations, saving them form unpleasantness and time lost in defending medical malpractice claims and so on (Charles, Pyskoty & Nelson, 1988). Lack of experience rating of insurance also means that physicians are able to bear little of the costs involved in medical negligence injuries to patients (Sloan, 1990). The validity of a negligence rule is also basically complex in that it is based upon showing the defendant had taken less care than that which is normally taken by average numbers of doctors having good reputation and depending upon the peculiar circumstances of the particular patient and doctor involved (Keeton, et al, 1984). Nonetheless, physicians do suffer loss of time during legal suits and also lose considerably in terms of reputation and energy due to such legal litigation (OTA, 1993). The Harvard Medical Malpractice Study (1990) also mentions quite significantly that every patient injury due to medical negligence does not result in them filing malpractice claims for damage and also that doctors have to bear substantially the costs of the accidents only when patients actually file such claims and not otherwise. In many instances, also, there are state imposed maximum caps on the actual damages that can be awarded in medical negligence cases. This in turn also affects the efficiency of filing negligence claims for the injured patients. The situation is complicated by the legal system which contributes for low external costs of medical treatment and resulting in below-optimum external private medical care. However, the reverse case in which physicians are exerted above optimal pressure due to malpractice claims lodged against them and increased rates of convictions can also contribute to increase in defensive medicine by doctors. It is difficult, therefore, to balance the interests of injurer and injured in malpractice claims by using traditional negligence rules. The propensity of physicians to adopt defensive medical practices gets enhanced by errors in judgment by judges in imposition of liability on the parties involved in the claim. Often, the liability rule makes the defendant health care institution provide above optimal care because it is often difficult to verify precautions taken by them to prevent injuries caused by negligence (Cooter & Ulen, 1986; Craswell & Calfee, 1986). For creating optimal incentives the legal rule should be able to reduce the total social costs due to accidents and the first principle of any tort law is to compensate the persons injured in accidents (Parisi and Mattiacci, 2003). Tort laws, as traditional based upon negligence rules, only afford for an expensive system for deriving such compensation, particularly due to administrative costs and in this respect, insurance appears far more cheap and faster in affording compensation to accident victims; also, first party insurance is much more effective than tort liability (Shavell, 1987). The redistribution of costs involved in insurance is also efficient and devolves upon the injurers, or may be shared by the victims or even paid with taxpayer money (McEwin, 2000). Among tort liability systems, no liability places residual liability upon the victims so that the injurers have no incentives to gain by taking adequate precaution to prevent medical or other accidents. In contrast to negligence based and no liability tort systems, however, strict liability does imposes efficient liability on the injurer, although the same does not enable the victims to take adequate or effective precautions in protecting against such accidents (Parisi & Mattiacci, 2003). There are also other forms of negligence rule as applied in tort cases from time to time. This includes the comparative negligence rule and the contributory which enables the injurer to evade liability by taking due and reasonable care. The contributory negligence rule provides for action against the injurer only if sufficient care was not taken by him or her, i.e., there was actually some negligence, and also if the victim had also taken sufficient precaution against accident (Parisi & Mattiacci, 2003). This gives rise to several complications and makes the awarding of adequate or proportional compensation all the more difficult when applying traditional negligence based tort rules to medical malpractice cases. This is what is implied by various experts (Parisi & Mattiacci, 2003: Shavell, 1980) when they state that traditional negligence based rules, although providing incentive to the injurer to take optimal precaution against accidents which may in turn help prevent accidents, the same rule means that the party other than the one taking precautionary measures appears to take this protection from the other as granted and does not engage itself in sufficient precaution. This implies lack of sufficient precaution against accidents being taken by both parties, injurer and injured, in totality. While negligence based liability rules generally led to both injurer and injured taking optimal care against accidents (Landes & Posner, 1980), there is also no negligence rule that can make both the parties involved take to optimum activity levels meaning optimality of precautions taken by them (Shavell, 1980). There are also other basic problems afflicting the negligence rule commonly applied in countries like England. One is the incidence of errors or uncertainty in deciding on compensation, the causal linkage behind tort related accidents and even negligence issues that can well distort the incentives for preventing the accidents (Calfee & Craswell, 1984; Craswell & Calfee, 1986; Diamond, 1974). There are also cases in which the injurer disappears or is declared insolvent in which case problems arise in awarding compensation based on negligence rule to the victims (Kornhauser, 1982; Sykes, 1981). Frequently, regulatory measures are utilized in contrast to tort based negligence rule either complementarily or as supplement in order to overcome problems due to such disappearing on insolvent injurer (Burrows, 1999; Kolstad, Ulen & Johnson, 1990; Schmitz, 2000; Shavell, 1984; Wittman, 1977). The negligence based tort system is also quite expensive as compared to insurance in regard to allocation of risk and the latter is often preferable even by diluting incentives from optimal precautionary activity (Shavell, 2000). Losses suffered due to medical negligence often also include cases where the victim has to forgo profits due the accident. In such a case, the victim is not compensated under the common negligence based tort rule (Bishop, 1982; Bussani, Parisi & Palmer, 2001; Rizzo, 1982). Compensation calculations also get complicated in those cases where the loss cannot be efficiently expressed in terms of money and the rule is not clear in so far as such cases are concerned, hence justifying both reasons for and against the rule application in such cases (Arlen, 2000). The problems with negligence based tort law led to the examination of alternative rules for determining liability under law, particularly in cases of medical negligence. This resulted in several new approaches, a notable one being the no-fault rule. According to this rule, which was similar to the rule applied in automobile no-fault insurance, it was envisaged that there would be significant improvement in quality of medical care given by physicians. Doctors could also learn from mistakes committed and the system would also allow for methods of discovering and rectifying systemic faults in applying law to medical care. Under the no-fault system, the patients who suffered harm due to medical accidents would be compensated irrespective of whether there had actually been any negligence involved in such accident or not (Robinson, 1986). A compensation fund for local injured patient was to be created into which funds would be contributed by doctors and patients so that there would be no need for liability insurance. Physicians would also thereby be encouraged to voluntarily report all of their mistakes and be fearless in discharging their duties towards their patients. They also did not need to fear litigation due to accidents that could occur even if the best precautions and inclusive efforts were taken by both patient and doctor. Boards would also be constituted to investigate cases of medical errors and try and pinpoint patterns in substandard practices of the doctors involved in the medical accidents (Shapiro, 2003). Learning from past mistakes would thereby be institutionalized and in turn create a conducive medical system in which doctors learnt from past mistakes and ultimately this would promote better qualitative healthcare system. However, like negligence based systems, this system obviously has its draws. While the broad goals of everyone is to improve the medical system as a whole, nonetheless, patients seeking damages for accidents can feel the need for deriving maximum benefits by way of monetary compensation awarded by the courts rather than be treated s test cases for learning about the whole medical system (Shapiro, 2003). One other problem is in defining what actually constitutes an event that is “compensable” (Robinson, 1986). It is also of essence to determine if the cause of the injury was actually due to medical intervention or not. Another potential issue is that patients with high risks from the medical care to be given may well avoid the medical system altogether since this could entail liability for wrong treatment anyhow and would not guarantee them any optimum care by the physicians treating them (Foster, 1994). Also, in contrast to negligence based liability rule, a no-fault system does not provide incentives to deter accidents due to medical errors (Robinson, 1986). Essentially, the twin aims of reforming the tort system consists of providing deterrence and compensation (Rosenberg, 2000). Caps on non-economic monetary compensation awarded, as practiced in several countries, only serves to limit the liability for action by a doctor towards medical accident involving his patient and this effectively weakens the deterrence function of tort legislation (Klayman & Klayman, 2001). While it was the Harvard Medical Practice Study (1990) that first highlighted deficiencies in the traditional negligence based tort law, it also was the first to recommend changing over to a no-fault based legal system. It recommended a very simple process in which the affected patient would first apply for compensation. The judgment would be done by review by a review panel on the basis of minimal proof of injury caused to the patient by the injuring doctor. While such a no-fault system could very speedily provide aggrieved parties compensation, it would not provided complete or total compensation as awarded under traditional tort systems. Nonetheless, the compensation would be guaranteed the injured claimant by the no-fault system. Additionally, at one stroke, the costs would also be reduced in as much as lawyer’s fees would become an explicit portion of the damages awarded, the payments would be periodic and would not cover pain and suffering, and also it would be health care institutions and not individual physicians to whom liability would attach (Cooter & Ulen, 1999). In this way, a no-fault system would also benefit doctors so that they would feel sufficiently protected against litigation and do their job well in discharging their duties towards their patients. In addition to lowering administrative costs, the no-fault system would also address the fact that presently fewer patients are getting awarded compensation under the negligence based tort rule than the actual number of medical accidents would warrant. Even the Harvard Study mentioned that the administrative costs would be halved from what it is presently (Harvard Medical Practice Study, 1990). The onus of liability for the accident on the hospital rather than on the doctors or healthcare persons involved in the medical accident would also serve to make the hospital adopt optimal measures to prevent such accidents. This would include quality of medical products sourced, quality of doctors and other person recruited as well as the quality of care provided to the patients. The traditionally risk-averse doctors could also resort less to so-called defensive medicine and be able to perform their duties well. In such respect, the no-fault system would be much more efficient than the negligence rule based tort law. Another possible solution that can be adopted is voluntary no-fault insurance. 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