Medical Liability:Canada, England andWales, Germany, and IndiaAugust 2009The Law Library of Congress, Global Legal Research Center(202) 707-6462 (phone) (866) 550-0442 (fax) [email protected] http://www.law.gov
LAW LIBRARY OF CONGRESSCOMPARATIVE SUMMARYMEDICAL MALPRACTICE LIABILITY SYSTEMS IN SELECTED COUNTRIESDoctors are usually held liable for malpractice in countries withgovernment-sponsored health care systems, but governments often take measuresto ease the related financial burden. This report analyzes physicians’ liabilitylaws in Canada, England and Wales, Germany, and India, and reviews relevantnational procedures and judicial rulings.I.Purpose of ComparisonThis report analyzes medical malpractice liability regulations in Canada, England andWales, Germany, and India. These countries were selected for the study because they providetheir citizens with a government-sponsored health care system. While these countries approachthe issue of medical liability differently, there are some commonalities in terms of scope andimplementation procedures. The report analyzes the countries’ medical malpractice liabilityinsurance programs, grounds for medical malpractice liability, types and amounts of damagesawarded by the courts, and certain procedural details.II.Health Insurance ProgramsAlmost all of the residents in the reported countries are covered by government-regulatedhealth insurance programs. Canada has a single-payer health insurance program that is mostlyfunded by the government. However, provincial health insurance plans may vary with regard tocoverage of specific services (e.g., dental care, eye exams, cosmetic surgery), which may becovered by supplemental medical insurance, or provided by employers as a non-mandated healthbenefit. The health care system in Germany is decentralized and diversified, and consists ofmore than 200 insurers who, to a certain extent, compete with each other for customers.Germany allows high-income earners to opt out of the statutory system and to be privatelyinsured. Almost 10 percent of the German population exercises this option. In England andWales, the health care system combines private physicians and hospitals with those whoparticipate in the National Health Service. Similarly, Canada allows private physicians to opt outof the single-payer health insurance program and bill their patients directly. Should they choosethis option, they are prohibited from billing the insurance plan for some services while billingpatients directly for others. The health care system in India, which is financed through generaltax revenues, community financing, out-of-pocket payments, and social and private insuranceschemes, combines private and public providers, with public sector health care being dividedbetween federal, state, municipal, and local governments.
Comparative Summary: Medical Malpractice Liability Systems – June 2009 The Law Library of Congress -2III.Medical Malpractice Insurance SchemesIn the countries under consideration, health care is provided either predominantly byprivate physicians (Canada) or by private and public entities (Germany, England and Wales). InGermany, private physicians and hospitals enter into agreements to become service providers forstatutory health insurance schemes. Health insurers may recover expenses attributable to theinjury through the statutory subrogation of the plaintiff’s claim. Canadian private physicians andthose who work for hospitals are required to obtain medical liability insurance (usually through aprofessional organization). Membership fees in the professional organization depend on the fieldof medicine in which a physician practices and the region where the medical services areprovided. These fees include insurance coverage and the right to be represented in medicalmalpractice lawsuits. At least a portion of membership fee is reimbursed by provincialgovernments in order to encourage physicians to practice in the provinces. In England andWales, all financial liability for the negligence of employees is undertaken by the NationalHealth Service Trusts, which are encouraged to participate in the Clinical Negligence SchemeTrust, which deals with medical malpractice negligence claims. Certain clinicians that are notconsidered to be employed by the National Health Service typically obtain indemnity through amedical defense organization or private insurance. In India, where health care is deliveredthrough partnerships between the public and private sectors, patients are treated as consumers ofmedical services, and the law provides them with consumer protection rights.IV.Grounds for LiabilityMedical malpractice claims are typically tort claims brought against an individualphysician for negligence, or claims brought against a medical institution under the principle ofvicarious liability. In England and Wales, if a physician is employed by the National HealthService, the latter is vicariously liable for the physician’s negligent acts and omissions.However, this indemnity covers only the financial consequences of the claim, e.g., legal andadministrative costs, plaintiff’s expenses and the amount of damages awarded. If a physician isexempted from the indemnity program coverage, he or she can be sued directly for negligence.In Canada, physicians are usually sued individually for negligence. Hospitals can also be heldliable for the conduct of their staff. German medical malpractice law is based on the Civil Codeprovisions on liability and on causes of action developed by case law. Under Indian law,services provided by a physician to a patient are considered to be not merely of a personal, butalso of a contractual nature and fall within the Consumer Protection Act of 1986. The law oftorts is applied when a case is not covered by the Consumer Protection Act (for example, whenthe services are rendered for free). A criminal complaint may be filed against a physician if hisor her negligent acts result in death. The burden of proof is on the patient to prove that thephysician was grossly negligent.V.Types of Damages AwardedIn Canada, plaintiffs are usually awarded compensatory damages. Punitive damages arevery rare and are awarded in exceptional circumstances, such as when compensatory damagesare insufficient or unavailable, and when the conduct is malicious or highly reprehensible. InGermany, punitive damages are not awarded at all. This type of damages is almost unknown to
Comparative Summary: Medical Malpractice Liability Systems – June 2009 The Law Library of Congress -3civil law systems. A plaintiff in Germany usually seeks damages for pain and suffering. InEngland and Wales, damages awarded to patients in connection with clinical negligence claimsare paid by the National Health Service Litigation Authority following the settling of most of theclaims out of court. In India, claims are adjudicated by consumer dispute agencies in the samemanner as all other consumer complaints, and the amount of redress is limited according to theagency’s territorial jurisdiction.VI.Amount of Damages AwardedAwards against physicians are generally rare and the amount of damages awarded tovictims of medical malpractice is relatively low (although in Germany the prevailing trend istoward a slowly increasing number and size of awards for pain and suffering). There are severalreasons for this:VII. No jury or punitive damages (Germany, India); Legally established guidelines for the calculation of damages limit recovery to certainsums (Canada, Germany, India); A considerable amount of the losses resulting from personal injury are borne by thesocial security system; The availability of free medical treatment and medications: Unlimited paid sick leave, generous pension plans, and welfare benefits (Germany); The practical difficulty of establishing professional negligence in court (Canada);and Partial recovery of the plaintiff’s litigation expenses where the case is not fullysatisfied, which discourages plaintiffs from claiming higher amounts of damages incases where the courts are not allowed to award damages beyond the amount ofrecovery sought (Germany).Procedural IssuesMost medical malpractice liability cases are settled out of court. Only 8 percent of thesecases are litigated in Germany, and only about 4 percent in England and Wales. In contrast toGermany and England and Wales, where settlement of medical malpractice claims by means ofalternative dispute resolution is encouraged, the Canadian Medical Protective Associationvigorously defends medical malpractice suits, and has been criticized on a number of occasionsfor rejecting reasonable settlement offers in order to discourage other lawsuits. A peculiarmechanism of medical malpractice dispute resolution was created by the Indian ConsumerProtection Act. The Act provides for a system of special institutions at the national, state, anddistrict levels (consumer councils) that have jurisdiction over medical malpractice claims undercertain specific amounts.
Comparative Summary: Medical Malpractice Liability Systems – June 2009 The Law Library of Congress -4VIII. ConclusionMalpractice lawsuits do not affect the delivery of health care in the countries included inthis report, and are not a subject of controversy. Because of an extensive safety net of sociallaws in the countries reviewed and the active participation of governments and otherstakeholders in redressing instances of clinical negligence, liability for medical malpracticegenerally leads to moderate damage awards. Most of the medical malpractice claims in thesecountries are settled and, as a rule, cases are only tried when a serious injury has been inflicted.In such cases, awards for pain and suffering tend to be greater.Prepared by Peter RoudikChief, Eastern Law DivisionJune 2009
LAW LIBRARY OF CONGRESSCANADAMEDICAL LIABILITYExecutive SummaryCanada has a single-payer health insurance scheme that covers virtuallyall residents. Most physicians are in private practice and they bill the insuranceplans for their services. Being in private practice, they require medical liabilityinsurance. This is usually obtained through a professional organization.However, physicians are reimbursed for a large portion of their insurancepremiums by provincial governments. Fees are lower than in the United Statesfor a number of reasons. Two of these are that Canada’s highest courts have setlimits on awards and the country’s liability laws make establishing professionalnegligence more difficult. Another is that the physicians’ insurance companydefends lawsuits very vigorously.I. The Canadian Health Care SystemAlthough Canada is often characterized as a country that has “socialized” medicine, itssystem differs considerably from countries in which physicians are essentially employed by thestate or the entire medical profession is under unified state control. In Canada, most medicalpractitioners are in private practice just as they are in the United States. Most physicians havetheir own offices, set their own schedules, and see patients who have chosen to come to them ona regular basis or for a particular condition. Canadians are not assigned doctors by thegovernment or an insurance plan. They do have choices. 1Where the Canadian system differs most significantly from that of the United States is inhow health insurance is provided. In Canada, all of the provinces have a single health insuranceprogram that covers virtually all residents. For example, Ontario has the Ontario HealthInsurance Plan 2 and Quebec has the Quebec Health Insurance Plan. 3 The federal governmentsubsidizes these provincial health insurance plans through its general revenues. There are noseparate payroll deductions to fund the health care plans and Canada does not have a separateold-age health care program like Medicare in the United States.1Bruce Robinson, Canada’s Single-Payer Health Care System—It’s Worth a Look, .html (last visited June 10, 2009).2Ontario Ministry of Health and Long Term Care, Ontario Health Insurance Plan, /ohip/ohip mn.html (last visited May 27, 2009).3Quebec, Regie de l’Assurance Maladie, Health Insurance: Coverage for Your Health, ladie/index.shtml (last visited May 27, 2009).
Canada: Medical Liability – June 2009The Law Library of Congress -2When the provincial health insurance plans were first created in the 1960’s and 1970’s,the federal government paid for about half of the provincial plans’ costs. This percentage fell bymore than half in the 1990’s, but has gone back up somewhat in recent years. 4 The provincialcontributions to the plans are also mostly from general revenues. However, the largest provinceof Ontario and a couple of other provinces also impose a levy on employers to help pay for theirprograms.As can be seen from the above, the Canadian system is more accurately described as a“single-payer” system than a “socialized” one. However, even this description needs to bequalified. Canadian physicians are not required to submit bills for their fees to the provincialhealth insurance plans. They can “opt out” of the systems and bill their patients directly.However, physicians who do decline to participate in a provincial plan must operate entirelyoutside it as they are generally prohibited from billing the insurance plan for some of theirservices and patients for others. In other words, physicians cannot be partial participants. Forthis reason, the vast majority of Canada’s physicians are enrolled in the provincial healthinsurance plans and earn virtually all of their income from the bills they submit to them.Canada’s provincial health insurance plans are generally similar, but do have somedifferences. For example, the Province of Quebec has more generous prescription drug coveragethan any other province. However, the similarities are far greater than the differences. One ofthe major reasons for this is that in order to qualify for federal subsidies, provincial healthinsurance plans must adhere to the guidelines set out in the Canada Health Act.5 The oneguideline that has been the subject of the most controversy over the years has concerned “extrabilling.” The Canada Health Act does not allow the provinces to permit physicians to billpatients for a portion of their services through co-payments or other types of additional fees. Thefederal government has remained firm in this position for many years on the grounds that it doesnot want to see the creation of two-tiered systems in which patients who could afford to pay for aportion of their health care would receive more comprehensive coverage and preferentialtreatment compared to those who could not afford additional health costs. In the past, someprovinces have lost a portion of their transfer funds for allowing some extra-billing, but a numberwould still like to be able to
medical defense organization or private insurance.lth care is delivered In India, where hea through partnerships between the public and private sectors, patients are treated as consumers of medical services, and the law provides them with consumer protection rights.