No-Fault Compensation for Medical Injury: Principles, Practice and Prospects for Reform

Chapter 10
No-Fault Compensation for Medical Injury: Principles, Practice and Prospects for Reform


Anne-Maree Farrell*


Introduction


Professor Sheila McLean’s interest in the issue of no-fault compensation schemes for medical injury, including the principles that should guide their establishment, is a longstanding one.1 In addition to her wide-ranging expertise in matters of medical law and ethics, this made her an eminently suitable choice on the part of the Scottish Government to chair the No Fault Compensation Review Group (NFCRG).2 The Group was established in 2009 to examine the potential benefits for patients in Scotland of a no-fault compensation scheme for injury resulting from medical treatment, and to consider whether it should sit alongside the existing medical negligence system.3 The Report setting out the NFCRG’s findings and recommendations was published in 2011 (McLean Report),4 and a further consultation on the Report has now been completed.5 At the time of writing, the Scottish Government has yet to respond to the consultation and announce whether it intends to implement the Report’s recommendations.


Two important themes (among others) run through Professor McLean’s published research on the topic, as well as the McLean Report itself: first, the importance of a principled approach to designing and implementing such schemes; and second, a critical appreciation of the fact that this is a complex and difficult area of civil justice reform. It sits alongside a number of government-sponsored reports across a range of countries on no-fault schemes, dating back to the late 1960s,6 as well as a voluminous academic literature in the area.7 The Report offers one of the most recent and cogent analyses of the social, political, economic and legal issues at stake in establishing no-fault schemes, albeit restricted to medical injury.8 As such, it provides a useful and insightful springboard for exploring what principles should underpin the design and implementation of no-fault schemes for medical injury, as well as providing an opportunity to review critically key aspects of existing schemes with a view to assessing the prospects for reform in Scotland. Drawing on a restorative justice model, it is argued in this chapter that a principled approach to establishing a no-fault scheme for medical injury requires that a redress package is offered which is responsive to what patients say they want as a result of suffering harm through medical treatment. This should involve paying adequate financial compensation; providing appropriate apologies and explanations; and facilitating professional accountability and lesson-learning in order to enhance patient safety and improve healthcare outcomes. Where this is not possible within the no-fault scheme itself, then I would concur with the findings in the McLean Report that, at the very least, a more ‘joined-up’ approach needs to be developed, which links the scheme to independent complaints procedures and professional disciplinary bodies.9 Ensuring that this redress package is provided offers the best chance of ensuring patient satisfaction with the scheme in the long term. Even if such reforms are implemented, the question remains as to whether aspiration will ever match reality. Based on a review of current schemes for medical injury in this chapter, it is suggested that the full implementation of the redress package recommended in the McLean Report is likely to remain elusive in practice.


In order to examine these arguments, the chapter begins with a brief overview of the available empirical evidence about what patients want in terms of redress, before proceeding to consider what principles and goals should inform no-fault schemes for medical injury. Thereafter, key themes in the literature on no-fault schemes are examined by reference to the arguments made about what injured patients want in terms of redress. Examples are drawn predominantly from the no-fault scheme for personal injury in New Zealand, as well as the more restricted scheme for medical injury which operates in Sweden. The final section offers some concluding comments on the prospects for reform and establishment of a no-fault scheme for medical injury in Scotland.


What Patients Want: A Redress Package


The McLean Report emphasises the importance of offering a redress package as part of a no-fault scheme that is responsive to what patients have said they want when things go wrong as a result of medical treatment. In this regard, the Report was picking up on empirical data that had been gathered in the United Kingdom (UK) and elsewhere on the issue. In the early 1990s, a seminal piece of empirical research was published which examined what injured patients wanted in terms of redress. It found that patients who had suffered a medical injury wanted an explanation and an apology for what went wrong, financial compensation, and for their treating doctors to be held to account for what happened to them. They also wanted lessons to be learned and reforms implemented where necessary, so that what happened to them did not happen to other patients in the future.10 In the early 2000s, proposals were put forward to establish a scheme to provide a redress package for injured patients, which included explanations, apologies, compensation and lesson-learning.11 The UK government eventually agreed to establish a National Health Service (NHS) Redress Scheme to provide this package in relation to claims with an upper limit of £20,000.12 To date, the Scheme has not been implemented in England, although Wales has now implemented its own scheme for claims up to a maximum of £25,000.13


As part of the NFCRG’s deliberations, an empirical research study was also commissioned to enquire into the views of Scottish patients who had suffered a medical injury. The findings from the study identified patient grievances as involving ‘an often complex and overlapping mix of concerns about communication breakdown, poor staff attitudes, inadequate general care and generally feeling disempowered’.14 Many patients had indicated that they had initially sought to have their grievances dealt with via established complaint procedures. While gaining access to such procedures was generally not perceived as problematic, patients were often dissatisfied with the outcomes, citing insufficiency in explanations provided and the fact that there was little evidence that lessons had been learned from what had happened to them. Unable to obtain what they wanted from their treating doctors, hospitals or complaints procedures, injured patients sometimes then decided to pursue medical negligence claims.


The decision to pursue such claims was therefore usually the final step in an extended process for such patients. The study concluded that the establishment of a no-fault scheme for medical injury would not necessarily fully address the full gamut of patient grievances arising from a medical injury, if its main aim was simply to provide financial compensation. If the scheme was limited in this way, then it was likely to result in ongoing problems, such as a lack of patient satisfaction and trust in their doctors and in the healthcare more generally. It was also stressed that if such a scheme was to be successful, then it needed to address both clinical and non-clinical aspects of the medical treatment and its aftermath for injured patients.15


A Principled Approach to No-Fault Schemes for Medical Injury


Claims alleging negligence resulting in personal injury in tort and delict systems are predicated on the fact that claimants are able to establish that a person or body owed them a duty of care, that this duty was breached, and that the breach caused them to suffer damage. Where negligence is proved and therefore fault established, the goal is to restore claimants to the position they were in prior to suffering personal injuries, through an award or settlement of financial compensation. This is often justified on the grounds of corrective justice. Deterrence is also said to be a by-product of the finding of fault in the tort and delict systems, as those likely to be held liable make suitable adjustments to prevent the negligent event from happening again.16


This fault-based approach has been the subject of sustained critique by both academic and policy-makers alike. Although an in-depth examination of the voluminous literature and reports on the issue is outside the scope of this chapter, it is useful briefly to summarise some of the more influential arguments that have been raised as part of this critique, in order to place political and stakeholder support for no-fault schemes in context. First, it has been argued that the fault principle is unjust in separating out those entitled to compensation due to accidental injury and those who are not. Second, the compensation awarded does not bear an appropriate, if any, relationship to the degree of fault. Third, there is little evidence of deterrence or lesson-learning so as to prevent similar events occasioning personal injury occurring in the future. Fourth, such claims only provide for awards of financial compensation and fail to deal with other crucial non-financial aspects of redress, in particular the need for rehabilitation. Fifth and finally, the adversarial legal culture which structures the conduct of such claims in tort and delict systems exacerbates rather than resolves conflict between the parties. The worst excesses of such culture contribute to excessive delay, a failure to resolve claims in a timely manner, a lack of transparency, unwanted burdens being placed on courts’ resources and high legal costs.17


In addition, the conduct of medical negligence claims have been singled out for giving rise to a number of problematic issues, including the significant disproportion between costs and awards of compensation especially in low value claims; excessive delay in resolving claims; the pursuit of claims without merit and the unwarranted defence of claims; a lower success rate than would be found in other personal injury claims; and the entrenched suspicion and lack of cooperation exhibited between parties involved in such claims.18 The perceived deficiencies of the fault-based approach for dealing with personal injuries have led to repeated calls across a range of countries for ‘no-fault’ schemes to be established as an alternative form of redress for injured patients.19


For present purposes, let us assume political and stakeholder support for such reform in the case of medical injury: which principles should guide such reform? The McLean Report recommended that the following principles should apply: accessibility, fairness, appropriateness of compensation, timeliness of adjudication and cost effectiveness.20 Facilitating access to justice is a key aspect of accessibility, as is ensuring that there is fair, independent and timely adjudication of claims made under such schemes. The goal of appropriate compensation should be to restore patients, as far as possible, to the position they were in prior to suffering the medical injury.21 The McLean Report also recommended that there should be a focus on the need for non-financial support as part of a principled approach to such a scheme. Although the NFCRG’s terms of reference were fairly circumscribed, the Group nevertheless emphasised that there were a number of other ‘desirable’ goals that should be taken into account in establishing such a scheme, including the importance of rehabilitation, improving complaints procedures, and facilitating a change in culture to bring about lesson-learning to improve healthcare outcomes.22 As stated previously, this also aligns with what injured patients have said they want in terms of redress.


Indeed, the principles recommended by the NFCRG to underpin the establishment of a no-fault scheme for medical injury in Scotland have their historical legacy in those espoused in the seminal Woodhouse Report,23 which led to the establishment of the New Zealand no-fault scheme in the 1970s. Two important principles underpinning the scheme were ‘comprehensive entitlement’ and ‘community responsibility’. Comprehensive entitlement was conceptualised as including both financial and non-financial redress. There was a particular emphasis on the need for rehabilitation, given the perceived failure on the part of the tort system to address this issue effectively.24 Although the concept of community responsibility was not well elaborated upon in the Woodhouse Report, the justification for the no-fault scheme clearly drew on distributive justice principles to underline the importance of collective social responsibility for citizens who had suffered accidental personal injury.25 It is an approach that finds support in the McLean Report in its justification of a more restricted no-fault scheme for medical injury:


[S]eeking compensation for medical injury presents special legal problems and on these grounds alone special consideration could be justified. In addition, we concluded that healthcare was a social responsibility; when something goes wrong it is not unreasonable to argue that society should pick up the bill to put it right in as much as this is possible.26


Such a justification recognises the complex and difficult issues faced in establishing liability in medical negligence claims, as well as the fact that healthcare is seen as a collective social responsibility in Scotland, underpinned by the NHS. Although those in favour of equality of coverage for all individuals who have suffered accidental personal injury have criticised more restrictive no-fault schemes, such as those limited to medical injury, the reality is that these restrictive schemes have now been operating in several countries for some time, covering personal injuries caused through employment related accidents, pharmaceuticals, and vaccinations respectively. In fact, New Zealand represents one of the few examples of an expansive approach to covering accidental personal injuries in a no-fault scheme. However, even the New Zealand scheme has been subject to criticism over its failure to ensure equality of coverage.27 In the end, the search for a principled justification for more restrictive no-fault schemes must necessarily take account of political imperatives, national historical and social trajectories, and questions of affordability in practice.28


More broadly (and importantly), the findings and recommendations in the McLean Report reveal a principled commitment to providing redress to injured patients that is not just based on distributive justice grounds, but incorporates what I would suggest is a restorative justice approach. I have argued elsewhere that no-fault schemes underpinned by a commitment to this approach are likely to offer a more responsive approach to what injured patients want in terms of redress.29 Although restorative justice has most often been applied in the criminal justice context, it potentially has much to offer in terms of providing a principled approach to guide no-fault schemes for medical injury. It emphasises the importance of accepting responsibility towards those who have suffered harm unjustly at the hands of another. This can take numerous forms, including offering apologies and explanations, repairing harm that has been caused or accepting accountability through mechanisms of public and private governance. Where the state is involved, it should be seen as having a particular responsibility for ensuring the accountability of such processes, including facilitating access to appropriate mechanisms that uphold the rule of law. This may include the provision of legal advice and representation, as well as ensuring that rights and due process are protected.30


Reviewing No-Fault Schemes for Medical Injury


As part of its work, the NFCRG undertook to examine a number of existing no-fault schemes for medical injury. My colleagues and I prepared a literature review of such schemes for the Group, covering schemes operating in New Zealand, the Nordic countries (Sweden, Norway, Denmark and Finland) and the limited schemes that had been established in Florida and Virginia for birth-related neurological injury.31 As part of the review, background interviews were conducted with a number of key stakeholders in both New Zealand and Sweden. While such a review could not hope to capture fully how the schemes worked in practice,32 we were able to analyse a significant amount of both normative and empirical published research in the area. This enabled us to examine the advantages and disadvantages of such schemes, and to identify a number of key themes for consideration by the Group.33 In the following section, I critically examine some of these key themes, evaluating them by reference to whether they are likely to contribute to a responsive redress package for patients who have suffered a medical injury.


Access to Justice


Access to justice is a widely used term within legal and other literature, however, it is subject to differing interpretations depending on pre-existing assumptions and perspectives, as well as context.34 For present purposes, access to justice is defined as incorporating both procedural and substantive justice, as well as promoting ‘equality of arms’ in relation to accessing no-fault schemes for medical injury.35 The question of whether greater access to justice is achieved through the establishment of no-fault schemes needs to take account of issues relating both to the quality and quantity (that is, financial compensation) of justice provided to injured patients. It could be argued that both may differ depending on the overarching principles which underpin the scheme, which in turn may structure access, eligibility criteria, level and type of compensation awarded, provision of medico-legal advice, and adjudication processes. Even where there is political support for no-fault schemes, the question of affordability in the long term may prove to be the ultimate arbiter in determining access to justice for injured patients, as well as whether a fully responsive redress package is made available.


Easy, Quick and Low Cost Access


Differing viewpoints have been offered within the relevant literature as to whether no-fault schemes for medical injury encourage greater access to justice. It has been suggested that such schemes are likely to provide a clearer ‘road map’ in terms of how to go about making a claim, with quicker times to resolution than would be seen in claims made under the tort and delict systems. Empirical evidence available from both the New Zealand and the Swedish schemes reveals the relative ease with which patients can lodge claims at minimal or no cost, which in the case of the former scheme includes assistance being provided by ‘registered health professionals’.36 Many claims relate to relatively minor injuries, or are otherwise low value claims. The claims are processed by claims handlers and this assists in keeping costs low at this initial stage. In Sweden, for example, 99.9 per cent of claims for medical injury are resolved through this administrative process, usually involving one claims handler and a medical qualified doctor who provides expert advice based on a review of the claimant’s medical records.37 Where the claims involve relatively minor injuries, then determination regarding coverage is usually made within a short period of time. However, claims based on medical injuries are often more complex, particularly in terms of establishing causation, which is still required to be satisfied under no-fault schemes. This means that determining coverage may take longer, lasting between six and nine months in the case of the Swedish and New Zealand schemes, respectively.38


The Phenomenon of Under-claiming


Notwithstanding claims that no-fault schemes do provide greater access to justice than is the case under tort and delict systems, it is clear that the phenomenon of under-claiming also exists under such schemes. The available empirical evidence from both the New Zealand and Swedish schemes is that there is significant under-claiming by those who would potentially be eligible for cover under the schemes. In Sweden, it has been estimated that only 10 per cent of those eligible to make a claim under the no-fault scheme in fact do so.39 With respect to the New Zealand scheme, injured patients from ethnic minorities, those who are socio-economically disadvantaged and the elderly are the groups that are least likely to make a claim, despite potential eligibility.40 In such circumstances, claims that broader access to justice will be achieved for injured patients under no-fault schemes cannot be taken at face value. As a result, how best to ensure that all patients who may be eligible for coverage have the requisite capacity, knowledge and support to access their potential entitlements under such schemes, requires more detailed consideration.


Eligibility


Designing eligibility criteria is crucial in terms of determining the nature and scope of access (to justice) to no-fault schemes for medical injury. In tort and delict systems, there is a need to establish both substandard care and causation in order to be ‘eligible’ for compensation in medical negligence claims. Given the difficulties in establishing liability in such claims, there is scope when designing no-fault schemes to offer an expansive approach to determining eligibility which sets a lower or alternative threshold for injured patients seeking redress, and this evidences a commitment in practice to providing greater access to justice. Approaches to eligibility criteria differ as between no-fault schemes, however, with some offering a more expansive approach and others less so. In the case of the NHS Redress Scheme in Wales, eligibility is determined by reference to a ‘qualifying liability in tort’, meaning that the same criteria for establishing liability in tort claims (that is, substandard care) must also be satisfied before injured patients may be entitled to coverage under the scheme.41