Stemming the tide of healthcare litigation

With a burgeoning load of unwarranted patient litigation threatening to drain public and private sector resources and disrupt overall healthcare delivery, urgent measures are required to address this unintended crisis.

That’s according to legal advisors at EthiQal, a division of Constantia Insurance, an innovative and disruptive local insurer of healthcare professionals. JP Ellis, Senior Manager: Legal and Claims at EthiQal, says a major driver of the ongoing dilemma is the Contingency Fees Act (66 of 1997), enacted to enable patients who cannot afford lawyers to enter into a ‘no-win, no fee,’ arrangement and gain greater access to justice. Unless the patient’s lawyer wins the case (in return for a maximum fee of 25% of the pay-out awarded), the patient is not liable for legal fees.  He says this has led to significant reckless and vexatious claims which tie up the courts and incur major legal defence expenses for healthcare practitioners – who have little recourse in recovering ‘out of pocket’ expenses. (Only in the most unusual of circumstances have the courts handed down punitive costs orders).

In the public healthcare sector alone, the bill, (still under audit), for legal claims against the State currently stands at R92 billion, further underlining the unintended outcomes and runaway nature of this legislative abuse. The National Department of Health, (NDOH), has deployed several teams of medical and legal experts across all nine provinces to wade through this mountain of litigation, some of which has already been found to be fraudulent, involve ghost claims and/or simply vexatious and without merit.

An overall litigious climate in South Africa has also contributed to annual indemnity premiums for higher-risk professions, (such as obstetricians and gynaecologists), in the private sector, reaching well over R850 000 per annum. (The State provides professional indemnity for public sector healthcare professionals.) According to surveys conducted by various medical speciality umbrella bodies, consultants in high-risk disciplines are considering emigrating or giving up their practices as the burden of cost overheads, defensive practise and administration becomes harder to tolerate.

The Contingency Fees Act makes no provision for criminal sanction or civil liability when it is blatantly abused through vexatious claims or patient lawyers overcharging. The only recourse available is a section of the Act which allows for the filing of affidavits on settlement of matters where contingency fees were charged. This is done via the relevant Law Society, the Rules Board as well as the judiciary.

 

Simple interventions with profound results

The EthiQal lawyers recommend two practical measures which they say will significantly mitigate the current undesirable abuse of contingency fees.

By filing affidavits at the outset of contingency fee proceedings, (as opposed to upon settlement), all relevant parties involved would be informed upon what basis the hearing is proceeding. This could be added to the relevant court’s practice manuals while amending the relevant section of the Contingency Fees Act to enable this to happen across jurisdictions.

Secondly, and as an integral part of this, ‘a certificate of merit,’ should be made obligatory to enable the plaintiff to proceed, thus enabling defendants to contest matters upfront – and the judiciary to deny vexatious cases and/or those without merit. This would free up the courts to deal with legitimate claims, save time and costs for all, and dramatically lower the gratuitous and avoidable defence burden.

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