Medical Negligence

‘Compensation gap’ for private patients questioned

Estimated read time: 4 mins

Carrie Tennick, February 05, 2020

The issue of compensation for substandard treatment by private healthcare providers has come under the microscope, with the release of a report into the inquiry into rogue surgeon Ian Paterson.

According to the ‘Report of the Independent Inquiry into the Issues raised by Paterson’, victims of the surgeon were refused compensation as his actions were criminal, rather than negligent, raising the issue of who is responsible.

Paterson “performed inappropriate or unnecessary procedures and operations”, largely on women who had been told they had breast cancer. He treated thousands of patients at Spire Healthcare hospitals.

Delays to compensation

As the report explains, claims for compensation after NHS negligence are managed and paid by NHS Resolution. Meanwhile, private patients can see claims settled by healthcare providers or healthcare professionals directly, or from others acting on their behalf, including solicitors, insurers or medical defence organisations.

Payment of compensation to Paterson’s victims was found to have taken a long time. For NHS patients, this was down to the high number of patients who had claimed compensation and the time it took to process these claims. The report revealed that so far, NHS Resolution has paid £17 million in compensation to patients Paterson treated in the NHS.

However, patients treated at Spire hospitals waited longer for their payments. This was because of legal disputes concerning which party, if any, was liable for Paterson’s actions in private practice.

Victims let down

The report, which was chaired by Bishop of Norwich the Right Reverend Graham James, found that claiming compensation for what they went through was exceptionally difficult for many victims.

It said that after being let down by Paterson, the NHS and independent healthcare providers, they were then let down by the Medical Defence Union (MDU), a medical defence organisation and indemnity provider. The MDU decided not to contribute to a compensation fund for victims on the basis that Paterson’s actions were criminal, not negligent.

The report said: “They then felt let down by the Medical Defence Union which used its discretion to avoid giving compensation to Paterson patients once it was clear his malpractice was criminal. Only by taking their cases to sympathetic lawyers did some patients find themselves heard.”

Gaps in cover

Medical defence organisations are not subject to financial conduct regulation and provide discretionary indemnity cover. This, combined with a “lack of clarity about whether private healthcare providers are vicariously liable for healthcare professionals’ actions”, means that there are potential gaps in clinical indemnity in the independent sector, said the report. These gaps do not exist in the NHS.

The report also raised the point that this risk does “not appear to be transparent to private patients” when they choose to have their treatment in this sector.

During the inquiry, the discretionary nature of the cover provided by medical defence organisations was questioned by witnesses. Steven Luttrell, medical director of BMI Healthcare, said this “is of concern”, as is the exclusion when criminal activity has been alleged.

Meanwhile, BUPA chief executive Alex Perry said: “It cannot be right that, as was shown in the Paterson case, that when something goes really wrong suddenly the cover is not there anymore.”

Safety net

A number of witnesses called for an industry-wide “safety net” so patients are not left uncompensated. Others highlighted that the current system of indemnity cover for consultants working in the independent sector is unregulated, adding that it should be regulated.

The committee overseeing the report recommended that the government should urgently reform the current regulation of indemnity products for healthcare professionals and introduce a nationwide safety net to ensure patients are not disadvantaged.

First4Lawyers spokesperson Andy Cullwick echoed the need for victims of substandard private medical treatment to be able to access justice. He commented: “We welcome attention being drawn to the issue of compensation for private healthcare patients.

“The need for a safety net for all patients is clear. A system where two patients have suffered the same mistreatment, but one receives compensation because their care was provided by the NHS and the other does not after being treated privately cannot be sustainable.

“We hope to see patient rights at the forefront of the legal system.”

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