Bill Madden: Paying for errors

WHO owes a legal duty to patients? The duty of doctors has been recognised for many years, originally based on legal principles surrounding contracts.

For the past 80 years, since the famous UK “snail in a bottle” case of Donoghue v Stevenson, duties under tort law have become more prominent.

Indeed, it appears to have been a medical practitioner from Adelaide, Dr Richard Grant, who brought the first Australian tort claim in 1932 when he sued Australian Knitting Mills Limited. The case went to the Privy Council, which found the manufacturing company owed a duty of care to Dr Grant, who had contracted dermatitis because of the “improper condition” of underwear he had bought.

But does this duty extend to a modern corporate medical centre?

Late last year, the NSW Court of Appeal handed down its decision in a matter known as Idameneo (No 123) Pty Ltd v Dr Colin Gross, which dealt with this. The decision cost the corporate manager of the medical centre $377 000 plus interest, with the court yet to make costs orders.

Idameneo (No 123) Pty Ltd was the corporate manager of the Bondi Junction Medical Centre in Sydney, where LB was a patient. LB was not informed that tests carried out for HIV were unresolved and she went on to have unprotected sexual intercourse with CS, resulting in the transmission of HIV to him.

Part of the reason for this outcome was that no one at the Bondi Junction Medical Centre (neither the receptionist nor the pathology nurse employed by Idameneo) confirmed with LB that her contact details were correct at the time of her visit, so she could not later be readily contacted to be told she needed to be retested.

The Court of Appeal was told the medical centre’s “invariable practice” was to confirm the name, address and phone number of the patient as listed in the medical record. This process was set out in the medical centre’s reception training manual and in the receptionist’s job description, yet was not followed with LB.

CS had brought a claim against the doctors and the medical centre and a settlement between CS and two doctors at the centre was reached in July 2009.

The latest litigation involved cross-claims by the doctors who had provided the medical services to LB against the corporate manager of the medical centre. There were also cross-claims by Idameneo against the doctors for breach of contract.

The contract between the doctors and Idameneo was that the corporate manager supplied a working space, administrative services and equipment, and support staff so that the doctors could provide medical services to patients. Each doctor conducted their own practice and paid Idameneo a service fee, being a proportion of the medical fees generated for the services provided.

As part of its contract with the doctors, whose medical practices it had purchased and to whom it provided services, Idameneo took possession of all their medical records. The practitioner contracts were also prepared by corporate manager.

Idameneo argued that it did not owe a duty of care to CS, the partner of the patient LB. The Court of Appeal disagreed, noting that in a more traditional medical practice the doctor, as well as providing medical services, would have control over his or her medical records and it would be the doctor’s responsibility to keep those records up to date. At the Bondi Junction Medical Centre those functions were divided between the doctors and Idameneo.

The Court of Appeal saw no difficulty in imposing a duty to maintain up-to-date records on the entity responsible for patient records — Idameneo (No 123) Pty Ltd, the corporate manager of the medical centre.

For doctors and corporate managers of medical centres, this recent decision of the NSW Court of Appeal may prompt a resolution — to check what is actually written in the training and procedure documents, and to confirm compliance with those procedures.

And, of course, to check what doctors’ contracts say about who is obliged to meet the costs of oversights and errors.

Mr Bill Madden is the National Practice Group Leader, Medical Law, with Slater & Gordon.

Posted 11 February 2013

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