Journal of the Royal Society of Medicine Volume 85 February 1992
Compensation for injury-a reappraisal: discussion
C J S Hodges MA
McKenna & Co, Solicitors, Mitre House, 160 Aldersgate Street, London EClA 4DD
Keywords: compensation; injury; fault; care; cost
After consistent rejection of calls for the introduction of no fault compensation, the clear defeat of the National Health Service (Compensation) Bill in February 1991 suggests that no fault compensation has little future in this country. The authorities are instead examining methods of addressing the problems of the present system, particularly funding (Legal Aid), delay and lack of legal practitioners' expertise. Several alternative systems were explored in the Royal College of Physicians (RCP) Report on no fault compensation1, but that did not seek to define moral imperatives which might form the basis of a new system. Examination of the fundamental principles upon which society's system of responding to injury should be based and the objectives which such a system should seek to achieve may assist in revealing a more comprehensive solution.
making mistakes and certainly ofrepeating them. Equally, the system should lead to generally available knowledge, first that a given mistake had occurred in given circumstances and might be avoidable and secondly, that individuals or companies whose conduct was particularly reprehensible would be penalized or have their activities regulated or terminated. (4) Responsibility and cost. The financial cost of making reparation should be borne by a person who has been at fault. Where damage results from a situation which involves inherent risk and could perhaps have been avoided, the responsibility should rest with the person who had greatest responsibility for that risk. However, society retains a general responsibility to care for its citizens.
Fundamental principles Without seeking to engage in exhaustive philosophical or ethical discussion, it is suggested that relevant considerations should include the following:
Problems in practice The English system of litigation is meticulously forensic. It is based on the premise that justice can only be based on the fullest possible knowledge of the facts of the case and with the benefit of objective expert views. In order to test the veracity of the evidence and the soundness of the expert opinion, the system necessitates debate and cross-examination in an adversarial context. However sound this approach may be in principle, it is time consuming and ideally requires the involvement of expert doctors and lawyers, inevitably involing considerable expense. Costs are borne by individual litigants, who also take the risk of being ordered to pay a proportion of the costs of successful opponents. This is perhaps necessary in order to discourage excessive litigation, as found in USA when there are contingency fees and rare costs penalties for losers. The high cost of litigation has resulted in national assistance to claimants but there are inherent difficulties over the total cost to the nation and the levels of threshold limits. Civil Legal Aid now covers only 37% of the population yet cost £600 million net in 1989/90. In addition to the inherent duration of any case (5 years on average), unconscionable delays are caused by a dearth of sufficiently specialized personal injury lawyers. Delays in the litigation process give rise to universal concern and bad publicity: Eli Lilly and ICI were among the supporters of Mrs Barnes' National Health Service (Compensation) Bill. A major problem with Rosie Barnes' Bill was that it would only benefit patients whose injuries resulted from NHS treatment. In a truly ethical system, there would be no differentiation between victims of different types of accident or unseen event. Whilst those victims of medical accidents who can prove causation may benefit from introduction of no fault compensation, those who cannot will remain without
(1) Access to justice. Every aggrieved party should have an equal and unrestricted opportunity of presentation of his/her full case to the tribunal, unfettered by financial or any other constraints. The investigation, preparation, presentation and decision of the case should be as speedy as possible. (2) Justice and adequacy of remedy. The legal principles should be of universal application, except where specific exemptions are justified. The decision should be fair and of as high a quality as possible. A tribunal should have access to all relevant factual information and the decision should be based on the highest standard of objective medical and legal expertise. There should be provision for an appeal on appropriate points. The tribunal should have power to invoke remedies which adequately fulfil the injured party's needs but the remedy should not oppress the party against whom it is made. If a financial penalty is awarded, the sum should be an adequate recompense for the damage suffered, as far as money can do so. Some might argue that deterrence is a factor, as in awards of punitive damages in USA against manufacturers, or fault liability in UK against doctors. (3) The promotion of health and safety. The system should aim at creating an atmosphere which encourages the most open and productive relationship between a doctor and patient, resulting in the maximum possible physical and mental health of the community, and the avoidance of
020092-04/$02.00/0 © 1992 The Royal Society of Medicine
Journal of the Royal Society of Medicine Volume 85 February 1992
redress, along with innocent victims of road traffic and other fortuitous accidents. The gulf between successful and unsuccessful claimants should no longer be widened by calculation of damages on the basis of full medical care on private rates, leaving the unsuccessful dependant on whatever facilities are offered by the State. The Social Security Advisory Committee suggests that the maximum benefits payable under the current UK system are only in the region of £4000-£5000 per annuml. It is not appreciated by the general public that the cost of introduction of a no-fault compensation regime would have to be paid in a low level of financial payments - certainly lower than that which is currently awarded by the Courts to successful plaintiffs in this country. Public expectations are based on media coverage of unusual awards fuelled by a 10-fold increase in 10 years in the size of awards in England and Wales, from an upper limit of £100000 in 1977 to £1 million in 1987. A record £2.1 million was awarded in 1991 to a boy severely handicapped in a car crash2'3. However, this rise in awards does not reflect an increase in the level of general damages awarded for pain and suffering but an increase in the special damages awarded for loss of expected earnings and the cost of care to a given plaintiff. Levels of damages differ widely in European states. It is estimated that compensation awarded for pain and suffering to a male doctor rendered quadriplegic aged 40 years with two children ranged from £162 037 in Ireland to £3937 in Portugal. Bereavement damages that would be awarded following the death of a 20-year-old single woman student vary between £210 122 in Italy to £1089 in Denmark. It is not surprising that a call has been made for a European Directive to harmonize levels of personal injury damages4 as the inevitable consequence of the European harmonization of product liability legislation and a plaintiff's ability to 'forum shop' between European jurisdictions. It is well known that awards under the no fault schemes in Sweden and New Zealand are lower than would be awarded through the Courts in those countries. Much of the criticism of legal remedies in the UK has focused not upon the modest levels of Scandinavian awards but upon comparisons with the enormous awards made under the entirely different mechanism in the United States with civil juries, contingency fees and punitive awards. Precisely because of the low level of awards and exclusions in Sweden, traditional litigation is now increasingly considered as an option there. Fear of 'defensive medicine' was stated as the prime rationale for the RCP's review of compensation systems in its Report. The pressure is to practise medicine in a way which ceases to put as a first consideration the best interests of the patient, and development of new methods which would benefit society generally, as against doing something which would minimize any risk of possible criticism and 'American style' litigation. Claims against obstetricians have doubled in 3 years as against a stable birth rate, resulting not only in increasing premiums but differential indemnity subscriptions for doctors of
differing specializations. The problem lies in the breakdown of the relationship between doctor and patient, which is threatened by outside intervention. Yet there is force in the
argument that, close as the relationship should be, it should not be immune to audit aimed at improving standards of care. (This is a far more helpful approach than the negative terminology of 'deterrence' of bad practice.) Much of victims' dissatisfaction might adequately be dealt with in a system which provides an adequate psychological response to victims. It is striking that in addition to access to a system which does not exclude cases which people generally consider to be deserving, victims often repeat that what they are most interested in is their need for a prompt settlement and an investigation and explanation of what happened, with people saying they are sorry if that is appropriate. The RCP Report referred to victims' concern to 'achieve a psychological closure of events'. Without a recognition of this medical need, society will not be achieving its optimum health and safety. This would suggest a system involving a swift investigation by experienced, disinterested experts followed by a full explanation and payment of appropriate compensation. In Sweden, for example, which does have a no fault compensation scheme, fatalities and some serious incidents are automatically investigated by an allocated local senior doctor. It has been suggested5 that either a UK investigative body could be set up or the British Medical Association's General Medical Council could perform this function. The RCP Report rightly accepted that a mechanism of medical accountability through scrutiny of each claim in which doctors are involved is required. Most important of all, any usable system should include a mechanism for establishing causation. A no fault scheme under which a citizen is made to pay compensation is inoperable without verification of injury and quite unjust without some inquiry that the injury was caused by the citizen. The problem is that such inquiries in medical cases are generally complex, lengthy and costly. Proper enquiry can lead to surprising (but just) results: re-examination of the National Childbirth Encephalopathy Study in the pertussis litigation led to the unexpected conclusion that the results of the study did not support the conclusion that whooping cough vaccine could cause brain damage. The case collapsed. Because of the need to prove causation, a no fault scheme would not benefit victims in any of the multi-plaintiff cases which have attracted media attention in recent years, such as Opren, pertussis and haemophiliacs nor brain damaged babies, innocent victims of road traffic and similar accidents. Perhaps because of causation difficulties, 42% of claims in Sweden under the no fault compensation arrangements fail (25 000 of 60 000 claims to January 1989). This compares with the BMA's assessment of a 45% rejection rate in the sample of claims which it studied on a no fault basis in this country. Information as to causation is, moreover, vital evidence in any system which is to cater for medical accountability and contribute to the promotion of health and safety by increasing knowledge and standards. In Sweden, a database has been established for this purpose, which cannot operate properly without evidence of causation. Even AVMA has concluded that the existing legal process is essential: 'Without the deterrent effect of tort to maintain high standards, and without any alternative mechanism of maintaining accountability, the public would have no guarantee of "safe" medical care' 6.
Journal of the Royal Society of Medicine Volume 85 February 1992
An alternative solution In a caring society, perhaps attention should begin with providing for the individual needs of every victim of accident or birth. This is, after all, the primary statutory duty of the Secretary of State for Health under the National Health Service Act 1977. Injured persons should have available all that they might require in medical, social and financial support services. Should not the emphasis of the system, and what individuals should expect from it, be primarily on providing the appropriate care and treatment to all, immediately and for as long as it is needed, rather than on litigation and ultimately money? One postulates a system in which a victim's complaint would be investigated by the authorities with expert assistance and not on an adversarial basis. This might be done on a centralized or, perhaps more appropriately, regionalized basis by a body which one will call the Personal Injury Agency. The Agency would
(1) assess the victim's requirement for assistance, and award and coordinate appropriate financial assistance and practical care by the Departments of Social Security and Health. As the RCP Report recommended, financial assistance would include a disablement cost allowance (replacing civil damages for pain and suffering) and income replacement benefit. The Agency would take a speedy and positive attitude to helping a victim and initiate care by other agencies. The availability of financial assistance would be based on individual need following injury - as is the availability of healthcare at present. There would therefore be no need to define a causation test. This is the general approach taken in Finland's Patient Injury Act 1986. Comprehensive disability income would be paid (favoured by the RCP) including disablement allowance higher than at present, and reasonable income replacement benefit (not so astronomic as some Court awards), paid regularly rather than in a lump sum and abated if income from another source became available to a claimant. The object of the system would be that the State would take care of victims and their families if and to the extent that they could not do so themselves, but it would not provide windfall riches and it would fix a level of benefit (as does Sweden) which would seek to encourage self-reliance and enterprise. (2) as part of the above process, investigate any issues of causation and accountability which may arise and take appropriate steps to publicise the risks which could be avoided in future. (3) instigate procedures to achieve accountability of individuals or companies, to result in recovery of appropriate penalties to be credited to the State and not the victim, who would already have been compensated. In the case of physicians, the GMC might be the appropriate forum. The tribunal would have the power to order the physician to pay a financial penalty to the Agency, which might be covered by the doctor's employers or insurers, encouraging their continual contribution to exert pressure on individuals' standards. In the case of companies, accountability would be through the civil courts on proof of negligence or strict liability as under the present system, including the state of the art defence.
Many areas of manufacturing and product sale are now subject to regulatory control by governmental authorities, and this will increase under legislation emerging from the European Community on general product safety. Breach of these regulations results in criminal investigation, prosecution and a fine. Is it necessary to duplicate lengthy investigations in both civil and criminal systems, which may involve complex facts in personal injury cases? If the State had the obligation of providing primary care and financial support for victims and their dependants, could not the State also, rather than the victims, assume the sole burden and cost of investigating and pursuing objectionable conduct by manufacturers and others who cause injuries (such as drunken drivers) and of obtaining payment from them where they have been at fault? This is similar to the civil law principle of the State being subrogated to the rights of an individual whose claim it effectively insures. Although the provision of care would primarily be the responsibility of the State, it could equally be 'topped up' by private insurance. Individuals might even have a choice of paying into a State or private fund. In those cases in which potential criminal liability is in question, a single hearing could sufflce. The existing tests would still apply for liability (which are, in general, absolute liability for regulatory offences, strict liability for defective products and fault liability for negligence) and for the burden of proof (in criminal cases, beyond reasonable doubt, and the balance of probabilities in civil cases). Companies should, as now, be able to insure for civil but not criminal liability. It could also be decided whether the Agency had the right to investigate and enforce against another organ of the State, or whether this should be left to the Ombudsman. (This issue was at the heart of the HIV haemophiliacs' problem.) Consideration would need to be given to whether the present exclusion of licensed medicinal products from the criminal provisions in Part II of the Consumer Protection Act 1987 should continue. This system would involve a number of financial advantages which might overcome the cost constraints recognized under a no fault system. First, some savings might flow from better cooperation and integration between primary healthcare providers, DSS and the Agency's investigators. Secondly, there could be savings in the avoidance of duplication between criminal and civil prosecutions. Most significantly, Legal Aid costs should be very heavily reduced. Individuals, and therefore the Legal Aid Fund, would no longer bear the burden of litigating a claim. The procedure could be such that any claimant or defendant would not require independent legal advice, although this would not be banned and particularly doctors and manufacturers might seek insurance. The primary cost would fall on the Agency. This could have a significant effect in multi-plaintiff cases, which would only involve the Agency and defendants rather than some representation for every plaintiff. The Agency's income would come from civil recoveries/fines and costs awards against defendants found to be at fault. Payment would be obtained from all found to be liable and it might be prohibited for several defendants in the same case to share the cost between themselves. Further options would include a reasonable initial fee by claimants (possibly means tested), or a small national levy (perhaps on
Journal of the Royal Society of Medicine Volume 85 February 1992
prescriptions, similar to the Air Travel Reserve Fund), or to increase the level of fines, which are currently not great compared to some awards of damages. Particularly serious conduct could be punished with punitive fines, but unlike the American system of punitive damages in civil law, a company would not be open to an unlimited number of punitive awards for the same historical conduct and potentially at the mercy of any number of successful plaintiffs, in addition to the damages which compensate them for their loss, with no money being paid to the State. If the Agency's investigation costs were covered by costs penalties on defendants, damages/fines could be set at a level to recompense the State for the cost of care to victims. The BMA estimated an annual cost of only £100 million under a no fault scheme in addition to existing security payments7. This approach satisfies the requirements that a system of general application should provide speedy compensation for victims on a no fault basis, accountability for those at fault, as well as encouraging improvement in standards by investigation of causation. The legal standards should not change
from that which apply in UK now, namely that an individual who is at fault, or a producer whose product does not eonform with the state ofthe art, should pay if he causes injury. But those who are not at fault, or who are careful enough to keep their products up to the state of the art, should not be penalized. Above all, more victims should be cared for more quickly and on an ongoing basis by specialist services available to all and at a reasonable cost. References 1 Compensation for Adverse Consequences of Medical Intervention. London: Royal College of Physicians, 1990 2 McIntosh D, Holmes M. Personal injury awards in EC countries. London: Lloyd's of London Press, 1991 3 The Times, 30 January 1991 4 McIntosh D. The Lawyer, 29 January 1991 5 Brahams D. Legal Business Magazine, December 1990 6 Freebon L. Legal Business Magazine, December 1990 7 Working Party Report on no fault compensation. London: British Medical Association, January 1991 (Accepted 31 July 1991)