A litigation alternative?

The Scottish Government is exploring the possibility of a no-fault compensation scheme – here Gareth Gillespie looks at how it works in Sweden

In 2009, the-then Cabinet Secretary for Health and Wellbeing, Nicola Sturgeon, set up the No-Fault Compensation Review Group, headed up by Professor Sheila McLean, director of the Institute of Law and Ethics in Medicine at Glasgow University. The aim was to assess the viability of a no-fault scheme as an alternative to costly legal fees and drawnout clinical negligence cases, many of which can take years to conclude.

The review group published its report in February 2011, which provided advice on some key principles and design criteria. A year later, the Scottish Government consulted on the introduction of a no-fault compensation scheme, which MPS responded to, and on 4 April 2014, the government published a report on its consultation. The report revealed an intention to cautiously explore the complexities of the scope, shape and development of such a scheme.

What is no-fault compensation?

A no-fault system in healthcare is a method of compensating for injury received when undergoing treatment, without attributing fault or blame to any one individual or institution. There is still the need to establish proof of injury, and the causation connection between treatment and injury, but compensation is assessed and granted or denied based on the eligibility of the patient, rather than the ‘negligence’ of an individual or institution. The process is non-adversarial – there is no ‘defence’.

"A no-fault system in healthcare is a method of compensating for injury received when undergoing treatment, without attributing fault or blame to any one individual or institution"

Similar schemes already exist in other parts of the world, including Finland, Sweden and New Zealand; MPS’s presence in New Zealand means we have some experience of the practicalities, which was useful in our response to the consultation, although the Scottish Government has indicated that any new scheme in Scotland would be based on the Swedish model.

The Swedish model

In Sweden, the system only applies to injuries sustained in the medical environment. It has been in place since January 1975, with conditions occasionally revised, and is now set down in statute.

Claimants who are unhappy with an award can appeal. They also retain the right to claim through traditional litigation through the courts. However, you cannot ‘double claim’, as any award via the scheme would be deducted from the damages awarded by the court.

There is uncertainty over the transferability of the Swedish model to Scotland, specifically because of Sweden’s different social welfare structure, which complements the no-fault model. Under their system, liability is borne by the healthcare providers, who pay compulsory premiums to a consortium of insurers. In Sweden, county councils bear most of these costs.

Compensation covers all medical care, pain and suffering, and earnings, with upper limits on payments that are updated from time to time. The procedure for making a claim omits the need for a lawyer, and involves the claimant filling in a form that is sent to a medical assessor at the insurance company. Claims can be brought up to three years from the injury becoming apparent. The claim is decided on the basis of notes and medical reports, unless more information is needed on medical condition and prognosis, and a report is sent to the patient.

If compensation is denied, the patient is advised of their right of appeal. The appeal panel meets 12 times a year, and the patient can have legal representation at this appeal. Legal aid is available for qualifying individuals who are unable to fund their own legal costs. Cases can go to arbitration by a judge of the Swedish Court of Appeal, whose decision is final.

What is a successful claim?

In Sweden, the injury must be the result of a decision, act or omission on the part of someone engaged in health or medical care. As with any system of compensation, there is the need to define a precise delineation: if the injury was unrelated to the medical care, it is not reasonable to expect compensation.

"Injuries worthy of compensation must result in a permanent disability or disfigurement of significance, or sick leave of a particular length of time"

However, if it was preventable, it is reasonable to provide compensation. A caveat to this rule is that it does not apply in circumstances in which the risk taken was medically indicated because of the threat of death or disability.

The no-fault system applies only to injuries not already covered by other forms of insurance, either from the state or held personally. Payments are subject to the exhaustion of all other avenues, claim sources, policies or entitlements (such as third party motor insurance, workers’ compensation, national health treatment, private medical insurance, etc).

Nothing is paid for minor injuries. Injuries worthy of compensation must result in a permanent disability or disfigurement of significance, or sick leave of a particular length of time. The philosophy is to draw a clear distinction between injuries worthy of compensation and those which are not, rather than establishing whether or not the medical practitioner is at fault.

What factors influence payments?

Decisions under the Swedish model are reached via the influence of certain questions, such as: 

• Was a better or less risky treatment available, which should have been chosen?
• Was injury caused by treatment later shown to have been unnecessary?
• Would it have been hypothetically possible to avoid the injury by performing the treatment differently?

However, the Swedish system is not entirely without some difficulties. Some cases of injury may be impossible to ascertain whether the injury was caused by the actions of the healthcare provider or the patient. Each case is considered on its merits, meaning there may be inconsistencies.

When is compensation not paid?

• Cosmetic surgery for reasons of vanity (though the right to sue remains)
• Emergency or life-saving treatment, unless negligently performed: the more serious the condition, the more serious the level of acceptable risk
• Psychological injury that is not organically based (because, under Swedish law, this is a response to the natural condition rather than to the treatment), but neuroses and nerve damage may be compensated
• Risks assumed by the patient to prevent death or disability
• Where the treatment was reasonable in the circumstances
• Pharmaceutical injuries, which are covered by other collective insurance arrangements taken out by manufacturers and importers (unless hospital staff administered them improperly).

What types of injury are covered?

Four groups of injury are covered:

• Genuine injuries arising in connection with medical interventions will be covered.
• Diagnostic injuries: if a correct diagnosis should have been made, compensation is payable for lack of or delay in correct diagnosis. Incorrect lab results are compensated, as is (formerly) negligent interpretation of results.
• Accidental injuries are covered on the ground that a sick person is more susceptible and requires a greater degree of care. The injury must be related to the equipment and/or the premises used for healthcare and not due (directly) to the basic illness.
• Injury arising from infection. This is effectively a ‘complication insurance’ where the principle is that no compensation is paid if the patient’s own bacteria is causal. If it is equally likely that infection is from treatment, then compensation is payable. For example, unless the procedure is incorrectly performed, no compensation is paid for infection after operating on an abscess or a ruptured appendix, or for surgery on colon or lungs, where the probability of infection is high. Here the system retains some negligence principles.

The Scottish model

The publication of the Scottish Government’s consultation report in April has left a number of areas still to explore, particularly with regard to the projected cost and eligibility criteria of such a scheme. The report is quite conclusive about the government’s ultimate goal: “We are still committed to ensuring that patients who have been harmed as a result of clinical treatment have access to redress in the form of compensation, where this is appropriate and that they have access to this without the need to go through lengthy court processes. We will continue to work towards developing a fair system and in doing so will aim to ensure that this will not be at the expense of other essential NHS services.”¹

"The publication of the Scottish Government’s consultation report in April has left a number of areas still to explore, particularly with regard to the projected cost and eligibility criteria of such a scheme"

As expected from an exercise that has such potentially far-reaching changes, there remain many complexities to address before any binding decisions are made. This article has looked at the system in Sweden; it has perhaps only served to temper any expectation of a straightforward port over from Sweden to Scotland.

In conclusion

No-fault compensation is an alternative under consideration in Scotland. This article has looked in depth at the system in Sweden; readers should bear in mind that this is not intended to indicate what might also be introduced in Scotland.

MPS would like any proposed system to be carefully trialled and, given that there are questions that still need answering over how the scheme will be funded, it would be sensible for any initial trial to take place in the hospital sector. As with any system, it has downsides. Inconsistencies or lower level of compensation could be a deterrent and the complexity of predicting costs presents a phenomenal challenge.

The current system of clinical negligence claims through the courts necessitates a detailed assessment of any case where injury is alleged. As well as payment of damages, patients will often express a sense of vindication when an error has occurred as someone has been held to account. The question is whether a no-fault system can offer sufficient compensation but also if this can tie into other forms of healthcare regulation. It is vital that any amended system does not lose the ability to identify system or individual failures, enabling improvements.

References

1. Scottish Government, Consultation Report – Consultation on recommendations for no-fault compensation in Scotland for injuries resulting from clinical treatment (April 2014)

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