This article was first published in the first-quarter 2016 edition of Personal Finance magazine.

More and more people in South Africa are taking their doctors and other healthcare professionals to court for medical malpractice – so much so that the increase in litigation is contributing to our high medical inflation. But you can’t take such action lightly: the legal process is fraught with pitfalls and can be very drawn out, and the costs can be high. You need to be sure of your case, and of all the hoops you’ll have to jump through, before pursuing a claim.

Essentially, you need to prove that a practitioner acted negligently in treating you or a member of your family, and that this negligence caused harm coupled with financial loss.

The terms negligence and malpractice are often used interchangeably. Strictly speaking, negligence is a failure to “exercise the care that a reasonably prudent person would exercise” in similar circumstances. Medical malpractice, according to Andre Calitz, the chief operating officer for personal injury law practice Joseph’s Incorporated in Johannesburg, is an evaluation of conduct measured against a standard of medical care established by the medical fraternity.

He says the onus to prove malpractice rests with the plaintiff. The first part of a malpractice case seeks to establish that the healthcare provider failed to provide the level of care determined by the norms, protocols and prevailing teaching methods of the medical profession at the time of the incident.

Calitz explains that to bring a successful medical malpractice claim, you need to prove that the treatment you received deviated from a particular “standard of care”, and that it was the deviation (which can be an act or omission) from this standard that resulted in harm. The “standard of care” is defined as what a reasonably prudent medical provider would or would not have done under the same or similar circumstances.

As part of this enquiry, the lawyers also need to establish what the acceptable complications of a particular procedure would have been and what the natural progression of a medical condition would have been in any event.

Many medical procedures are inherently risky and even under the most expert care can have bad outcomes. In these cases, doctors are obliged to explain the possible risks of a procedure to you before the procedure, and you must give your informed consent. Doctors need to have efficient and accurate record-keeping processes in order to defend themselves from malpractice litigation. Absent or poor record keeping is classified as professional negligence.

In the event that a nurse or other hospital employee was negligent, the employer is responsible for the actions of the employee. As with cases against doctors, the negligent act is evaluated against established protocols and standards.

Examples of medical malpractice involving doctors include making surgical mistakes, leaving medical instruments inside the body during a procedure, cutting tissue in error, interpreting test and lab results incorrectly, resulting in the wrong diagnosis, or treating a condition inappropriately. Examples of malpractice involving nurses include failing to communicate new symptoms to doctors, administering the wrong type or dose of medication and failing to use equipment correctly.

When negligence results in harm or loss, it can become a case of medical malpractice.

A new, relatively untested issue involving medical professionals was introduced with the passing of the Consumer Protection Act in 2008. In the context of health care, the term “service” means work performed by a person for the direct or indirect benefit of another, including the provision of medical advice by a health professional. The Act thus widens the range of events for which you can claim compensation. It also enables you to seek compensation from manufacturers of medical products and devices in the event of their malfunction.

Instigating a claim

In the past, a lawyer acting for a wronged patient might have advised his or her client first to report the matter to the Health Professions Council of South Africa (HPCSA), the professional body mandated to register health professionals and ensure practitioners are fit to practise, before proceeding with a civil case in the courts. Even though the HPCSA does not have the power to arbitrate on compensation, the rationale was that an HPCSA ruling and censure of the doctors concerned would improve the chances of a patient succeeding in a civil case.

However, the increasing inefficiency of the HPCSA has ensured that this is no longer the preferred route for potential litigants. The grave state of the organisation is now official; a task team appointed by the Minister of Health reported its findings in November 2015, describing the HPCSA as suffering from “multi-system organisational dysfunction”.

A case can be opened only if the alleged malpractice happened less than three years previously. There are a few exceptions to this general rule. If the injured party was under 18 at the time of the incident and his or her parents failed to seek compensation on behalf of the child, on turning 18, the child has one year to seek compensation on his or her own account. An injured party suffering from a mental illness has three years to make a claim on recovery from this illness. Exceptions might also be made if the injured party was compelled to be outside South Africa during the three-year intervening period.

The first step is a letter of demand, a letter sent by your lawyer to the doctor or health facility concerned, setting out your claim and the period in which the accused should meet it. Thereafter, getting a case to court can take up to four years. Accurate case data and hospital notes have to be gathered; records relating to the patient’s prior medical history, treatment at the hands of the suspected transgressor, and any subsequent treatment must be obtained. Then, lay witnesses must be found, expert witnesses briefed and court dates agreed on. In addition, both the patient’s medical condition and prevailing medical treatments have to be researched.

According to Joseph’s Incorporated, proof of negligence is decided on the basis of a balance of probabilities. If you want to pursue a case, the onus is on you to prove negligence, as well as damage due to the negligence (see “Burden of proof”, below). Medical experts have to provide relevant, credible, reliable information, as it is certain that opposing lawyers will look for any opportunity to discredit them.

Going the court route

You must decide how you are going to fund the legal process. Most parties Personal Finance spoke to warned that the legal process is adversarial, long, arduous and emotionally and financially draining. How long it takes depends on the availability of court dates in a creaking, overloaded legal system. At your first appointment, your lawyer will give you a broad indication of the process involved and the likely costs. There are four options:

* Fee-for-service model. Taking a malpractice case to court could cost over R200 000 due to the high fees advocates and attorneys charge. A decision on costs will be made by the court and will depend on the merits of the case. However, even if the case is successful, the awarded compensation might be less than the legal costs, and if the case is unsuccessful, you might have to pay your legal fees, as well as the those of your doctor.

Unless you or your medical scheme has a clean case with obvious merit, many lawyers discourage you from going to court, as the costs are high, the process uncertain and the emotional toll severe.

* Contingency fee model. An alternative to the fee-for-service model, where the injured party takes all the risk, is the contingency fee model. This option, provided for by the Contingency Fees Act of 1997, offers a mechanism for people with insufficient funds to access the courts if they have a good case. Under the terms and conditions of the agreement, lawyers provide their services on a “no win, no fee” basis. If the case is successful, the lawyers are entitled to double their fees to a maximum of 25 percent of the settlement, whichever is lower.

Because it is expensive and slow, the contingency fee option is viable only for wronged patients with severe injuries and large potential damages. Joseph’s Incorporated accept less than 10 percent of the contingency-based malpractice cases presented to them.

“There has to be financial, as well as legal, merit to the case,” Calitz says. “Twenty days in court at R50 000 a day will cost R1 million. It is no good if the victim gets only a pyrrhic victory. Ultimately, the case is about sending the victim away with money in his or her pocket.”

* Legal aid. Legal Aid SA, a state agency that provides legal advice to those who cannot afford it, takes on medical malpractice cases selectively, depending on merit. “Our mandate permits us to fund litigation of medical malpractice and we have certainly done so in the past,” Legal Aid spokesman Mpho Phasha says. “We favour those cases where there is greatest impact, those that affect communities or where a legal principle is at stake.”

* Legal consulting firm. A fourth option may be to contract with a legal consulting firm. Sunelle van Heerden, spokesperson for Pretoria-based Christopher Consulting, says the firm offers comprehensive funding and litigation solutions to clients. In return, it contracts to take a percentage of the compensation.

“Our firm assists potential claimants with the evaluation and processing of claims and the appointment of litigation partners. We fund all necessary disbursements and costs of litigation and stand in for the risk of the client.

“Our business model does not require our clients to pay a deposit or any costs associated with the trial, including advocate fees or special witness fees. Our remuneration is payable only if the claim is successful. [Clients] will never be at financial risk, or out of pocket.”

Van Heerden says the firm has a panel of medical and legal advisers who evaluate potential claims to determine whether or not there is merit in each case.

“We have an obligation towards the medical industry, taxpayers and the public as a whole to ensure that no frivolous litigation takes place, and to bring better understanding to the difference between medical negligence and an unfortunate medical complication,” she says.

It should be noted that consulting firms such as Christopher Consulting are not bound by the Contingency Fee Act. According to the website lawyer.co.za, there is no law in South Africa that stipulates how compensation awarded to a wronged patient should be split between a “financial backer” and a plaintiff.

Mediation and arbitration

Mediators aim to facilitate discussions between parties in a legal dispute by assisting them to identify issues and explore a compromise as an alternative to the dispute being settled in court.

In the private sector, many legal contracts of all kinds stipulate the use of mediation or arbitration in the first instance, so it is quite common. Typically, a retired judge or senior advocate presides over the matter. In mediation, he or she listens to both sides and assists the parties to reach a compromise. In arbitration, the presiding officer can impose a binding decision, and can decide whether compensation is due and if so, how much.

The downside of private arbitration is that the arbitration award (the judgment) is generally not published or disclosed. An open process and a reasoned judgment are essential for legal accountability and the establishment of case history.

Joseph’s Incorporated is in favour of arbitration as long as the process provides for an appeal option.

According to Donald Dinnie, the national head of litigation and dispute resolution at law firm Norton Rose Fulbright South Africa, the Department of Justice and Constitutional Development has set up pilot studies introducing arbitration as a dispute-resolution option in certain magistrate’s courts.

“This is a good step; it provides an avenue for potential litigants to engage with service providers they believe have been negligent. Such a process assumes the willingness of both parties to engage in good faith, and to compromise, if this is appropriate,” Dinnie says. “Where the matter at hand is relatively simple and perhaps the quantum of the possible award is not that significant, it provides a way forward. I am not sure how effective such an option would be in a more complex case where the stakes were higher, the possible longevity of the victim was in dispute and the quantum of the award was higher.”

One proponent of the voluntary mediation route is Stephen Kellerman, the chief executive of Natmed Financial, which provides malpractice insurance to doctors. He says that the toll of very large awards is having a negative impact on the medical profession.

“There are no easy answers, but there are a number of practical steps that can bring stability to an ailing industry,” he says. “In my view, mediation is one of the best options we have available to us and it should be promoted and embraced (by plaintiffs and defendants) more widely. Mediation is inherently a process of reconciliation as opposed to litigation, which is adversarial (and unpleasant).

“A significant problem with the court process, as it stands, is the determination of life expectancy (especially with babies), which is fraught with difficulties. Parents may receive too much or too little compensation; causing strain for the system or unnecessary financial duress for parents. Medical expense awards are also estimated at private-patient rates (as much as 50 percent higher than medical scheme rates) – unnecessarily so, as most patients have medical scheme membership, with an already agreed, reasonable tariff,” Kellerman says.

Even though current compensation awards take longer lifespans into account, there could still be a mismatch between the assumed lifespan and the actual lifespan of the patient. An arbitration agreement that contracts medical providers to cover the cost of health care for the actual lifetime of the patient removes this risk, Kellerman says, and it would provide the greatest benefit. Waiting for five to eight years for a court resolution is avoided, and there is no erosion of compensation by contingency fees (up to 25 percent), as the costs of the mediation are usually prescribed by fixed tariffs. The process does not place an emotional or financial burden on the injured party, and resolution, if done proactively from the outset, could take less than two years.

So is it worth it?

If you have a big, easy-to-prove claim, it appears that there would be no shortage of lawyers willing to take on your case on a contingency-fee basis. However, relatively lower claims may be more cost-effectively settled by mediation.

NON-DELIVERY

Despite that fact that the Constitution promises you the right to health care, no one has successfully sued the State for the non-delivery or lack of health care. Several test cases have concluded that, despite the Constitution and the Patients’ Rights Charter, the government has no absolute obligation to provide access to health care. Instead, the government is required to “progressively realise its obligations” to its citizens. In practical terms, this means, for example, that a patient who needs dialysis and cannot be treated because of a lack of facilities cannot sue the State.

BURDEN OF PROOF

According to the Joseph’s Incorporated website, four elements need to be proved in a medical malpractice case:

* Physicians, healthcare professionals or providers had a duty to provide health care to a specific patient or patients;

* Healthcare professionals or facilities failed to provide the standard of medical care;

* This failure to provide the standard of medical care resulted in harm to the patient or patients; and

* There were financial implications to the harm caused, hence a claim for damages (for example, medical costs and loss of income).

RISE IN CLAIMS A CAUSE FOR CONCERN

It is not easy to get a full picture of the increase in medical malpractice cases in South Africa, as there is no central register. Cases can be settled in court, out of court or via mediation. If matters are settled out of court or via mediation, there is no public record of compensation. However, if all sources of information are collated, it would certainly appear that both the number and levels of claims are increasing, and this is affecting the overall cost of health care in the country, including what you pay for medical scheme cover.

Statistics presented by the not-for-profit medical insurer, the Medical Protection Society (MPS), in a recent document, “Challenging the cost of medical negligence: the case for reform”, show that both the frequency of litigation against MPS members and the levels of compensation are increasing.

MPS insures doctors in the private sector. According to its figures, thought to be conservative by some practitioners, the number of claims increased by 27 percent between 2009 and 2015, and claim size escalated by an average of 14 percent over the same period. At the Medico-Legal Summit, a once-off event convened by the Minister of Health, Dr Aaron Motsoaledi, in March 2015, MPS’s head of medical services in Africa, Dr Graham Howarth, said that the highest claim currently, lodged in 2013, was for R80 million.

The report noted that MPS did not believe that the increase in the number of claims against its members reflected a deterioration in professional standards during this time.

Figures released in September 2015 by the Democratic Alliance’s Gauteng shadow MEC for health and member of the provincial legislature, Jack Bloom, show that R540 million was paid out by the Gauteng Provincial Department of Health as compensation for medical malpractice between 2010 and September 2015. This is money that would otherwise have been used to provide health services, Bloom says.

Is our situation unique? According to the MPS report, in the United States there have been two waves of legal reforms prompted by medical malpractice claims: one in the mid-80s and another in the early 2000s. Reforms were driven by an increase in insurance premiums and concerns about access to health care. Since 2000, 29 states in the US have introduced limitations on damages; some limit both “economic” and “general” damages (compensation for pain and suffering), while others cap only general damages.

The low point for the Australian medical insurance industry was in 1999 and 2000, with exponential increases in medical insurance premiums and the collapse of the HIH Insurance Group in March 2001. Since then, Australia has introduced a series of reforms, including the capping of compensation awards and dispute-resolution procedures that stipulate mediation or arbitration as the first step.

In the early 2000s, countries such as New Zealand, Sweden and Denmark introduced “no fault” compensation systems whereby patients who sustain avoidable injuries are compensated by government-funded bodies without the use of attorneys.

Deon Irish, an advocate who specialises in medical malpractice and a guest speaker at the annual Hospital Association of South Africa Conference in September 2015, said factors that contributed to higher awards included the longer lifespans of patients, improved technology and a broader range of allied health professional skills designed to improve the quality of life of impaired patients.

“Twenty years ago there was little that could be done to make the life of a disabled person better, save for making them more comfortable, which a kindly, unqualified person could do. Now, we have teams of allied professionals, such as speech therapists and physiotherapists, all of whom have to visit regularly to have any effect on the progress of the patient. These services, while essential for the patient, have contributed to higher compensation awards. In some ways, the high awards are a victory for the many successes in medicine, so much more can be done to improve the lives of people disabled in one way or another,” Irish said.

One of the main catalysts for the increase in malpractice claims is thought to be changes to the Road Accident Fund (RAF) Act, which reduced the number of lawyer-led claims to the RAF. The changes may have prompted lawyers to focus on other types of personal injury claims, in particular medical negligence.

Additional factors could be the general increase in awareness of patient rights, thanks to the Consumer Protection Act, and aggressive advertising by some personal injury specialists.

Members of the legal fraternity do not take kindly to allegations of “pocket lining” (an accusation made by the Minister of Health during the Medico-Legal Summit), pointing out that victims of medical malpractice are entitled to both legal representation and fair compensation.

Chris Archer, the chief executive of South African Private Practitioners Forum, says it is fashionable for health practitioners to blame lawyers for the increase in malpractice cases, but the working conditions of many health professionals also play a role. “Many health professionals work in solo practices or small partnerships without professional support or routine peer review. There is limited use of protocols and guidelines and little to no teamwork among private practitioners,” he says.

He says that a move to large group practices, where there is mentoring, in-service training, agreement on protocols, mandatory use of protocols, routine and accurate record-keeping and greater teamwork, would improve outcomes for patients.

“Even the lowliest member of the team, including hospital staff, must be empowered to report dangerous behaviour. Labour wards must be run like the cockpit of a passenger airline,” he says.

He notes that research from the Hospital Corporation of America demonstrated that it was possible to achieve massive reductions in both the number and quanta of claims through the proactive restructuring of labour-ward processes to improve patient safety.

Looking for answers

The debate on fair compensation for injured parties versus the economic stresses these awards impose on society was the main topic of the Medico-Legal Summit. Proposed solutions included the use of capped payments and “no fault” compensation.

However, according to Stephen Kellerman, the chief executive of insurer Natmed Financial, these may not work in South Africa and could be subject to constitutional challenge.

“Special damages (compensation for the injured party’s future medical expenses and loss of income) probably cannot be capped in South Africa, and this usually represents the largest part of any claim. Without adequate compensation for legitimate injuries, patients would be totally dependent on our public healthcare system for their future care. Receiving compensation from private sector healthcare providers and then relying on the state for any shortfalls is unfair,” he says.

He says that paying out special damages on a monthly basis and “as and when” medical expenses are incurred, as opposed to making lump-sum payments, is beneficial for all parties. Lump-sum payments (and the reliance on estimates) are placing financial strain on healthcare providers, insurers and injured patients.

The system of monthly reimbursement of medical expenses incurred (and any loss of income) would be a seamless experience for medical scheme members; insurers could reimburse schemes directly.