A key strategy of the Department of Health to tackle its multi-million rand burden of medico-legal claims has been dealt a major blow, with the Supreme Court of Appeal (SCA) – in a strongly-worded judgment – saying the state must act to reduce risks instead of seeking to change the law dealing with negligence.
Medicalbrief writes that in the landmark case dealing with a damages ruling arising out of a cerebral palsy negligence case at Cecilia Makiwane Hospital in Mdantsane, Eastern Cape, the SCA reversed a High Court order which allowed the provincial Health Department to take care of the patient’s medical needs at state facilities instead of paying a lump sum amount.
Daily Dispatch reports that the mother had claimed R23m, and although the department had admitted liability, it had argued that the provincial hospitals – ironically including the one responsible for the child’s disability – could take care of the boy’s future medical needs and that there was no need for the department to pay exorbitant amounts for this in a “one-off” payment.
The mother’s claim had included special and general damages in her personal capacity (R1m); general damages (R5m); future hospital care, medical and related expenses for the child (R7m); and loss of earning capacity (R10m).
The Eastern Cape High Court (Bhisho) had found there was a compelling case to develop the common law in terms of lump sum payment obligations, saying that if the state had established it was able to provide future medical treatment at a standard equivalent to, or better than that of the private sector, it need not pay out a lump sum for future medical treatment.
That judgment followed a 2021 Constitutional Court ruling that had established the principle that the government could provide medical negligence victims with services as they required them in the public sector, instead of giving them one-off lump sum settlements to cover the estimated cost of future care in the private sector.
The Eastern Cape matter was seen as a test case for developing the common law so that “pay as you go” could become routine instead of requiring case-by-case agreement between the parties involved in medical negligence claims.
But the SCA disagreed. It ruled that the legislature – and not the courts – was the major engine for law reform, notes a Business Day report.
Judge Ashton Schippers, in his ruling, said there was sound reason for the rule that damages must be awarded as a result from one cause of action and that this should be the end of the matter.
“The rule thus ensures finality and protects parties against multiple, piecemeal actions for damages, thereby ensuring fairness to both parties.”
If the Eastern Cape High Court had its way, there would be constant disputes whenever the appropriate service, treatment, medication, device or equipment became unavailable at provincial hospitals, added the judgment, and “courts could become long-term administrators of public healthcare, rather than adjudicators”.
He wrote that the Eastern Cape High Court had abolished the rule in complete disregard of the impact of its order on other fundamental rights, without considering the social and economic effects of the order on cases of this kind nationally.
“It did so with no assurance of the continuity of treatment or payments by the province under the order, apart from the say-so of the defendant’s (Health Department’s) witnesses.”
The SCA said developing the common law in this way was not the answer to the fact that the Eastern Cape had the highest number of medico-legal cases involving cerebral palsy in the country, arising from the negligence of hospital staff.
The judgment said the mother had testified that she did not want to take her child to the same hospital whose negligence had caused his condition.
“What this shows is that reforming the law of damages involves policy-laden decisions,” the SCA said.
“It is not merely correcting an injustice, but reshaping health policy and public finance, and impacts upon the rights to dignity and equality before the law.
“These are legislative questions, not judicial ones.”
The SCA set aside the High Court order and replaced it with one restoring a conventional damages framework, including lump-sum compensation for agreed future medical and related care, provision for professional caregiving, therapy, assistive devices, transport and case management.
It referred the matter back to the High Court for the determination of outstanding quantum issues and for the establishment of a trust to administer the damages awarded on behalf of the minor child.
The Daily Maverick says the landmark decision highlights the inadequacies of public health services in the Eastern Cape, overturning one of the key legs of the department’s strategy to deal with escalating medico-legal claims against it, now sitting at between R37bn and R40bn.
Most are for babies with cerebral palsy injured during birth. The largest financial burden of the payouts is the component for future medical expenses for the children. These are difficult to quantify, and successful claims result in court orders for multimillion-rand lump sum payments that must be made immediately.
Staff negligence
“The real reason for the high incidence of children born with cerebral palsy in public hospitals in the Eastern Cape is negligence by the staff – the same hospitals which have been ordered to provide the public healthcare remedy. Indeed, Dr Rolene Wagner, who heads up the department, conceded that there is no comparison between the public and private healthcare sectors regarding the occurrence of cerebral palsy cases.
“And the province has the highest number of medico-legal cases involving cerebral palsy in the country, arising from the negligence of hospital staff.
“Is the answer to the ongoing negligence … that the common law should be developed? I think not. And this, when the evidence discloses that the remedies will not result in the saving of public funds, unless the state reduces the risk of medical negligence,” Schippers added.
He said in the trial record, Wagner had testified that funds for the remedies had been ring-fenced for the then current financial year, and that it “will be ring-fenced in the ensuing years”.
However, on her own evidence, funds for the remedies were ring-fenced for only two financial years. This, in circumstances in which Wagner conceded that the department’s “financial position is a threat” to the services it generally provides, let alone to its ability to sustain the remedies; and where the department was already unable to pay its suppliers for services provided.
At the time of her testimony (November 2021), the department owed suppliers R1bn, with a projection that it would stand at R45bn at the end of the financial year.
Professor Alex van den Heever, an expert in public health funding from the University of the Witwatersrand, also gave evidence on behalf of the plaintiff.
“He observes that the department’s books are in dire shape: it carried roughly R1.8bn in overdue invoices (mostly medical and pharmaceutical bills), and about 7.2% of its budget was tied up in arrears in excess of 30 days – by far the worst in the country. Indeed, systemic mismanagement of, and unauthorised and irregular expenditure by, the department are common ground,” Schippers said in his summary of Van den Heever’s evidence.
Van den Heever also expressed strong doubt that the department had the capacity to provide the healthcare the child needed at a standard equivalent to that in the private sector.
The reasons for this were financial mismanagement, more specifically, high levels of irregular and unauthorised expenditure, which included the failure to budget for predictable liabilities such as medico-legal claims, he noted.
Several other government departments, Health Minister Aaron Motsoaledi and other provincial Health Departments made submissions to the SCA as “friends of the court”.
Motsoaledi’s legal team argued that the first ruling should stand “to protect the fiscus and the sustainability of the public health system”.
National rules
The provinces argued for national rules so that they could be applied uniformly “to protect provincial healthcare budgets from total collapse under escalating litigation”.
Andrew Donaldson from the National Treasury said medico-legal claims were increasing faster than available resources: between 2018 and 2019, they increased by 24%, while resources to provincial Health Departments increased by 7%-8% per year.
He further testified that the increase in claims and their payment as a lump sum threatened the state’s capacity to provide and improve health services. The actual payments made in respect of court cases amounted to 3%-4% of the department’s budget and were a drain on its resources, which could be better used for other purposes.
Between 1 April 2014 and 31 March 2021 the department had settled claims totalling R3.462bn, with the unbudgeted money having to be withdrawn from other programmes, reducing the money available to provide healthcare.
Schippers said that the evidence before the trial court made it “irrational to conclude that lifelong future medical treatment for the child will be provided at (Eastern Cape state hospitals), or that future payments will reliably be made under the remedies”.
He pointed out that the Eastern Cape Rehabilitation Programme (the Rehabilitation Programme) for children with cerebral palsy, using a multidisciplinary team approach, which was set up to provide these services, had no data to prove its efficacy and no evidence of long-term staffing, infrastructure or service continuity.
Eastern Cape Health Communications director Siyanda Manana said it would ask for leave to appeal this case to the Constitutional Court.
He added that the appeal was not an attempt to evade responsibility, and that in the specific case before the court, the child had been provided with all the medical care he needed.
The department “remains committed” to reducing negligence, and was “improving clinical standards, despite the impact of the historic debt on our ability to sustain services”.
The department said it had settled claims totalling R3.462bn between 1 April 2014 and 31 March 2021 with funds not budgeted for, drawing from other programmes, which had severely affected service delivery, says Business Day. By 2021, it faced a contingent liability of almost R40bn largely as a result of medical negligence claims.
It said it could not afford to pay out the huge lump sums required for a child’s future medical care.
In this particular case, the child needed extensive care as he was unable to stand, walk, or sit, and was incontinent. He was virtually blind, totally dependent on a caregiver for positioning, mobility and all activities for daily living, including undressing, bathing, dressing, eating and drinking.
He has a predicted life expectancy of 23.
Officials have also been troubled by the ease with which unscrupulous lawyers and relatives can siphon off money from lump sum settlements, leaving victims dependent on public services and effectively making the state pay twice.
In its testimony, the Eastern Cape Health Department and its expert witnesses submitted evidence from investigations into alleged misconduct by attorneys, including one case in which a single firm had received R480m on behalf of medical negligence victims yet paid only R115m into their beneficiary trusts.
See more from MedicalBrief archives:
Eastern Cape women's lives at risk in maternity wards, commission finds
Eastern Cape Health slammed over negligence claims
E Cape Health guilty of medical negligence in R28m action
Court grants R16m and free medical care in Easter Cape negligence case