Medical Indemnity: The Way Ahead
Sydney Morning Herald
Saturday May 4, 2002
After the recriminations in the wake of the collapse of United Medical Protection it is time to look ahead. The Federal Government was caught unprepared in what briefly became a time of high, if somewhat artificial, drama this week when some doctors and surgeons suspended services for private patients. Calm has been restored by the Government's guarantee of malpractice insurance until June 30, but it must move with clarity and purpose towards long-term solutions.
The immediate task will be to make provision for the long tail of outstanding claims against Australia's biggest medical malpractice insurer. The Government should adopt the approach it took to repairing the damage left by the HIH Insurance collapse last year, when it set up a new company, HIH Claims Support Ltd, to deal with outstanding claims against HIH. The benefit of this approach is that claims can be settled early and in full until the residual assets of HIH or UMP are realised to meet a portion of the payouts.
That will still leave the underlying causes of UMP's collapse a combination of rising damages awards against doctors and UMP's own improvidence in the face of that rising tide of claims. In the recent hectic churning of blame, UMP's management have rightly been criticised. But for the core problem the unsustainable escalation of damages awards it is the legal system generally and judges in particular that, not for the first time, have been found at fault.
Coming as it did so soon after the HIH collapse, the impact of the UMP crisis has been profound. The soul-searching has gone deep, and crossed party lines. The Prime Minister, John Howard, with his judgement that ``the community has become too litigious" and the Premier, Bob Carr, with his talk of some plaintiffs' ``roulette wheel mentality" have been in rare agreement. Although no government leader, state or federal, has gone as far as to revive explicitly the idea of no-fault insurance such as New Zealand has adopted and the Whitlam government proposed three decades ago the search for solutions has taken debate to the very margins of that territory.
While the Federal Government sets about cleaning up the UMP mess, the states are pressing on with further changes designed to rein in excessive damages. On Thursday Mr Carr announced a bundle of changes to NSW law to require doctors and others defending personal injury claims to show only that they took reasonable care; to hold lawyers personally liable for court costs if they instigate ``unmeritorious" public liability insurance claims; to cap damages; to limit access to courts. Even with such changes, though, the scope for excessive judicial generosity will still be wide. The Chief Justice of NSW, James Spigelman, in a recent speech offering a model for ``principle-driven reform", enumerated almost a dozen ways judges might moderate the scale of their damages awards. It is with judges that the problem begins. And it is with them that the solution short of far more radical reform ultimately lies.
© 2002 Sydney Morning Herald
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