23 October 2003
The Honourable Tony Abbott MP
Minister of Commonwealth Department of Health & Aging
Parliamentary House Canberra
Canberra ACT 2600
By Facsimile: 6273-4146
Thank you for meeting with me and the four other medical negligence specialist plaintiff lawyers on 21 October. [Bill Madden from Slater & Gordon, Malcolm Charlton from Charlton Shearman Read, Terrence Stern solicitor and Leonard Levy SC.]
As you will appreciate, there is much more evidence available to support the propositions outlined in the Overview document we gave you. We look forward to taking up your offer of a further meeting. Given the limited time it would be useful to know precisely what areas would be of particular interest to you so that we can concentrate our efforts on assembling the most useful information.
I would like to address some matters arising from our meeting at this time.
The composition of your committee is a matter of concern. Early reports stated that this would consist of two doctors, a lawyer and you. I had assumed that the lawyer would represent the interests of the patients given the strong representation for the doctors. The committee announced last week comprises you, four doctors, two government officials responsible for finance and a lawyer who specialises in insurance law. There is nobody on the committee to represent the interests of patients.
It is not correct to say that the matters under consideration will be limited to insurance and finance. The terms of reference clearly include an examination of current and proposed tort reform. In his 11 September 2003 letter to the Prime Minister AMA President Dr Glasson refers to the need for “fundamental changes to the indemnity and compensation system” in order to placate angry doctors.
I intimated in my letter to you of 7 October that the AMA’s agenda was not limited to the indemnity issue. Their goal has been, and continues to be the eradication of medical litigation altogether. In this regard I am enclosing for your consideration an article from The Australian dated 18 July 2002 titled “Abolish right to sue doctors: AMA”. A letter to the editor of the Financial Review dated 23 July 2002 is a counterpoint to this. That letter is enclosed as well.
Clearly Dr Glasson together with Dr Pesce (an obstetrician and outspoken critic of medical litigation), Dr Sheldon (an orthopaedic surgeon and one of the “eminent persons” on the Ipp Panel selected by the Prime Minister to overhaul tort law) and Dr Page (a rural GP with an obstetric practice) will be advocating for further legal reforms including to limitations law aimed at curtailing the rights of children. The impact of present and proposed tort reform on patients injured by medical negligence is a matter that requires the presence on your committee of at least one lawyer who actually practices in this area and can present the case for the interest of the patients.
On the subject of the impact of present tort reform I draw your attention to what appears in the AMA’s website under the heading “Actions on Medical Indemnity Crisis”. The AMA says that tort reform has not impacted. A copy of the relevant page is enclosed.
You will have gathered from the material presented to you at our meeting that this statement by the AMA is blatantly untrue. Whilst the inevitable flow-on effect of tort reform on the cost of claims will take time to bite, there can be no doubt of the present impact of these reforms on patients injured as a result of medical error. In New South Wales alone thresholds following tort reform have effectively abolished medical negligence claims worth less than $100,000.
We can provide you with documents presented in previous inquiries that demonstrate hat most medical negligence claims are settled for less than $100,000. These modest claims have never been blamed for the “crisis”. Rather it is the very small number of very large (often obstetric) claims for the catastrophically injured, like Callandre Simpson, that are identified as the principal cause of the high cost of claims.
I pause here to remind you about our discussion about the Callandre Simpson case. Doctors and the public would be staggered to learn that UMP only ever paid $1 million of that (originally $14 million) verdict. The balance was paid by an overseas reinsurer. The claim was unprecedented in that it dragged on in the court for a total of 13 weeks, including the pursuit of a cross-claim against the hospital, without significant cost saving concessions that other insurers ordinarily make. UMP’s action drove up the costs, even though the defendant doctor actually admitted liability to the plaintiff, albeit at the 11th hour. The decision not to settle the case had the effect of “burning dollars”. The avoidable outcome was then used to promote the political cause of demonstrating in fact the potentially enormous cost of litigation.
You appeared to be both surprised and concerned to learn that following tort reform in NSW parents of children who died as a result of medical negligence will receive little or nothing by way of damages. Prior to tort reform, damages for emotional harm in these cases was usually assessed at between $50,000 and $75,000. Following tort reform these cases would be classified as “not serious” and damages would be between $0 and $15,000.00. To say that the loss of a child is not serious is an obscenity. But that is the effect of what the AMA achieved through the tort reform package it forced through the NSW legislature under threat of a walkout.
I suspect you would be even more surprised and concerned to know that a NSW ophthalmic surgeon who sued a newspaper which wrongly reported that he performed an operation negligently (the court found that his negligence was in failing to warn his patient of the risk of blindness, not in the performance of the operation itself) was awarded $250,000 compensation for damage to his reputation. That award was upheld on appeal to the High Court. The patient who became totally blind following the procedure was awarded only $120,000 for her pain and suffering. Her appeal that the damages for pain and suffering were too low was rejected.
Contrary to the myth promoted by advocates of tort reform, damages awards in Australia for pain and suffering in personal injury cases are low. Tort reform legislation in NSW has now capped damages for pain and suffering at the maximum of $350,000 for the “worst case scenario”. In other words the surgeon who was awarded $250,000 for the personal distress caused by the injury to his reputation received compensation equivalent to 71 percent of what an 18 year old quadriplegic with a 60 year life expectancy would get for a lifetime of pain and suffering.
To put this into further perspective for you, you referred at our meeting to a newspaper report about a painter who fell from a ladder and was awarded just over $1 million in compensation for injury to his back. You appeared surprised by this. I am enclosing a copy of the judgment. You will see that the injured man was only 32 years old at the time of the accident. He had multiple, unsuccessful spinal surgery. He is never going to be able to return to work. His quality of life has been significantly and permanently affected. General damages for pain and suffering were assessed at only $135,000.00. Moreover, he had to repay nearly $250,000.00 on account of workers’ compensation payments received.
As you will hopefully appreciate, Minister, all is not what it appears to be. The AMA’s push for tort reform is based on the erroneous propositions that litigation is out of control, damages are too generous and all of this is leading to unaffordable insurance for doctors. The facts put the lie to the doctors’ position.
1. Compared with the incidence of avoidable medical error causing serious injury and death in Australia, the number of claims lodged in court is minuscule. The common law system already creates significant barriers to patients seeking to sue doctors. Not least of these is the threat of having to pay the doctors’ legal costs if the claim does not succeed. Tort reform, with its draconian thresholds, has made access to justice practically impossible for many if not most people with modest claims who are injured by medical negligence.
2. Damages for personal injury were not generous to begin with and are less generous now. In addition to the lower damages scale tort reform will seriously erode the damages in larger cases such that compensation awarded to catastrophically injured people will run out long before the person is expected to die.
3. Nobody who has actually considered the evidence believes that increased litigation is the principle cause for doctors’ high insurance premiums and now the IBNR levy. UMP’s mismanagement and aggressive expansion is largely responsible for this. Responsibility also rests with external factors like the poor global investment climate and the high cost of reinsurance after the collapse (due to corporate mismanagement) of HIH and following the events of September 11, 2001.
As I told you when we met, those of us who represent the injured cannot make demands of the government. We cannot hold the public to ransom like the doctors can do. A protest by the half dozen or so children who are brain damaged each year in this country and who can prove that this is due to obstetric negligence will go unnoticed. But plaintiff lawyers can provide you with the truth. And with the truth there is an opportunity to make a principled decision.
We were all encouraged by your apparent willingness to critically examine the evidence and determine the truth about the “medical indemnity crisis”. My own impression was that you are sensitive to the injustice of patients injured by negligence being denied proper compensation. Moreover, I sensed that you are uncomfortable with the idea that doctors should escape legal accountability for their mistakes. You should know that former UMP Chairman Dr Richard Tjiong once said:
“A responsible profession such as the medical profession ought to own up to its obligations to compensate patients for the true negligence of its members.”
We have no illusions that in the finish the government’s decision whether to yield to the doctors demands will be a political one. All the same I do not know where it is written that making a principled decision is bad politics. On the contrary, I would have thought that a principled decision based on fact rather than misinformation and exaggeration would be refreshing and well received by the Australian public.
I look forward to hearing from you again, as discussed. I am especially interested to know whether you will now reconsider the constitution of your committee. Without at least one lawyer in that group to speak for the interests of patients, your committee could hardly escape the charge of being biased in favour of the doctors.
Maurice Blackburn Cashman