A precedent set by the recent Eastern Cape High Court (Bhisho) ruling freeing the Eastern Cape Health Department from paying out lump sums to medical negligence victims, is likely to be adopted by other provinces and could change how such claims are handled in future.
The judgment is expected to drastically reduce the scale of medical negligence payouts made by the province’s Health Department, and accompanies Treasury’s growing concern at the rising medico-legal claims against the state, and cost to the public purse, reports BusinessLIVE.
“The ruling is significant as it has the potential to change how medico claims are settled,” said Rural Health Advocacy Project director Russell Rensburg. “Previously the award was based on the cost of treatment in the private sector, so this has the potential to reduce costs.”
The Eastern Cape Health Department would be closely watched to see if it could deliver on its promises, said a retired medico-legal adviser to the Western Cape, David Bass.
Malpractice
“This important judgment shows it is feasible to present this option (the public health remedy) in settling medical malpractice cases. “There will now be a lot of scrutiny of whether the Eastern Cape Health Department can walk the walk,” he said.
Provinces reported contingent liabilities (the cost if all claims were successful) of R120.3bn in the 2021/2022 fiscal year, the majority of which were for severe birth injuries such as cerebral palsy.
Lawyers’ fees
Citing testimony from Eastern Cape Treasury official Godfrey Howes, Judge Rob Griffiths said up to 40% of the payouts made by the Eastern Cape Health Department to a single law firm between 2015 and 2021 were lost to lawyers’ fees.
His ruling builds on a 2021 Constitutional Court judgment stablising the principle that the government could provide medical negligence victims with the services they required at state healthcare facilities instead of paying one-off lump sum payments based on the cost of care in the private sector.
As previously reported in MedicalBrief, the High Court has gone a step further, upholding the Health Department’s argument that the common law needed to be developed to accommodate this “public health remedy”, and that it had the capacity to provide care to the victim, a child with cerebral palsy.
Instead of agreeing to the more than R30m claimed on behalf of the child, Griffiths ruled that the provincial Health Department should pay only a lump sum of R2.1m for general damages, loss of future earnings, an adapted vehicle and modifications to the child’s home.
Private providers
The ruling includes an undertaking by the provincial Health Department that if it cannot provide the goods or services the child requires, it will pay for private sector providers.
Eastern Cape head of health Rolene Wagner said the ruling had “huge significance for future disbursements” because it would dramatically reduce the amount of money being paid out in future and alleviate some budget pressures.
The Eastern Cape saw its continent liabilities for medico-legal claims increase more than tenfold between 2013/2014 and 2020/2021, rising from R3.5bn to R38.8bn during this time. It paid out R3.462bn to successful claimants over this period, according to the judgment.
The department had paid out R921m in medical negligence claims in the 2020/2021 fiscal year alone, said Wagner.
See more from MedicalBrief archives:
Eastern Cape Health: R920m in negligence payouts and R4bn in unpaid bills
Calls for specialised medical courts as top surgeon hit with more charges
High Court summons over delayed medical negligence cases
Eastern Cape medical negligence problem is ‘a runaway train’
Court blocks Eastern Cape’s attempt to stop medical negligence payments