CLAIM TRENDS
In August 2012, the Australian Institute of Health and Welfare released the latest in a series of reports on medical indemnity claims in the public and private sectors. The report examined claims made, current or finalised, in the 2010-11 period.
Errors in procedure represented the highest proportion of claims (nearly 26%), followed by errors in diagnosis (20%) and errors in treatment (16%). In terms of medical specialties, procedural errors contributed to the bulk of claims against gynaecologists (67%), general surgeons (58%) and orthopaedic surgeons (61%). Diagnostic errors were the most common source of claims against emergency physicians (51%).
The data also revealed a statistically significant increase in large claims. While claims settling for over AU$500,000 accounted for 2% to 3% of settled claims in the previous reporting period, the percentage nearly tripled to 8.7% during 2010-11.
COMMON LAW DEVELOPMENTS
In October 2012, the High Court granted special leave to appeal against the New South Wales Court of Appeal's decision in Wallace v Kam [2012] NSWCA 82. The decision concerned whether a doctor is liable to a patient who has suffered an injury as a result of an inherent risk of a procedure if the patient would not have consented to undergo that procedure if he or she had been warned of a risk of different injury that never actually eventuated.
Dr Kam had performed a lumbar fusion and pedicle screw fixation on Mr Wallace. Mr Wallace suffered local nerve damage as a result of the surgery, which was an inherent risk of the procedure.
The trial judge found at trial that Dr Kam had negligently failed to warn Mr Wallace of the risk of the local nerve damage (which he suffered) and had also failed to warn him of a 5% risk of paralysis (which he never suffered). However, Mr Wallace could not prove that he would have declined the surgery had he been warned of the risk of local nerve damage. While Mr Wallace would not have agreed to the surgery if he had been warned of the 5% risk of paralysis, the trial judge decided that, because Mr Wallace had not suffered paralysis, Dr Kam's failure to warn him of the risk of paralysis was not causally relevant to his loss. Mr Wallace's claim was therefore dismissed.
On appeal, Mr Wallace argued that his injury was caused by Dr Kam's negligent failure to warn of him of all the material risks associated with the surgery. Mr Wallace contended that if had he been warned of both risks, particularly the risk of a catastrophic outcome of paralysis, he would not have undergone the surgery. The Court of Appeal dismissed the appeal and affirmed the trial judge's finding that Dr Kam was not liable as a result of failing to warn Mr Wallace of a risk that did not materialise.
A successful High Court appeal has the potential to substantially increase the number of claims that can be made against health care providers. It raises the potential for plaintiffs to "shop" for risks they were not warned of but would nonetheless have been significant in their decision making, even though the risk never eventuated. However, based on the recent trend in the High Court's decisions involving medical negligence cases, insurers probably need not take steps at this stage to rate their premiums based upon the potential for the appeal being allowed.
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