The Guardian July 4, 2001

Victims of medical negligence lose common law rights

Last week, amidst all the furore of the Workers' Compensation Bill, the 
NSW State Labor Government quietly slipped through another Bill removing 
many of the common law rights of victims of medical negligence.

The Health Care Liability Bill has many similarities with the Workers' 
Compensation Bill and earlier changes to motor accident compensation. All 
three pieces of legislation severely restrict access to the common law 
rights of victims.

The Health Care Liability Bill introduces thresholds for access to 
compensation, places caps on the amount of general damages that can be 
claimed and is retrospective where legal proceedings have not commenced 
when the Act comes into force.

The Bill places a cap of $350,000 on general damages for pain and 
suffering. This amount will only be paid in the most extreme case.

All damages will be assessed as a percentage of that most extreme case. For 
example, some brain damage along with orthopaedic injuries might rate at 60 
percent. The calculations of percentages are highly subjective. The actual 
payment will be calculated on a sliding scale, according to the percentage 

A person who suffered an injury which yielded pain and suffering of 15 per 
cent would be entitled to $50,000. Anyone with less than 15 per cent would 
not be entitled to compensation for pain and suffering.

It will deny many patients who have suffered painful and debilitating (but 
perhaps not permanent) injuries as a result of negligently performed 
medical procedures the right to seek damages.

For example, compensation will no longer be available for incidents where 
swabs or instruments are left in the body after a procedure; for scarring 
and disfigurement as a result of cosmetic surgery; and closed period' 
injuries as a result of negligently performed procedures which require 
corrective surgery.

The Bill will deprive a significant number of people who suffer significant 
pain from being compensated.

The patient puts faith in the doctor to deliver a service to a requisite 
standard of care. The doctor receives payment for providing that service. 
The threshold provisions are, in effect, a licence to injure. They allow 
negligent doctors to injure their patients up to a limit without 

The Bill also increases what is known as the discount rate. This will 
affect all claims for ongoing wage loss, ongoing medical treatment expenses 
and ongoing care requirements.

For example, a young worker on $600 a week is the victim of medical 
negligence and will not be able to work again. The lump sum payment is 
calculated on the basis of $600 per week over 40 or 45 years. This is then 
reduced (discounted) by three percent to take into consideration expected 
additional income from interest as the money is invested.

This three percent is an estimate of real income from interest after 
allowing for inflation. The Bill raises this discount rate to five percent. 
The net effect of that seemingly small increase in the discount rate is not 
so small. In real terms it could mean a reduction of 25 per cent in 

The Bill also removes the right to exemplary and punitive damages.

Exemplary damages are presently available where the conduct of the medical 
practitioner was wanton, disclosed fraud, malice, violence, cruelty, or 
where they acted in "contumelious disregard for the plaintiff's rights" 
such that the Court may consider that an extra amount of compensation is 
payable to punish the defendant.

Such behaviour might include fraudulently creating or amending medical 
records; having a sexual relationship with a patient or covering up the 
true circumstances of a neonatal death.

Taking away the right of injured victims simply cannot be justified. The 
real basis for the so-called indemnity insurance crisis has not been 
satisfactorily established.

The Bill was pushed through Parliament with the support of the Liberals in 
the early hours of last Friday morning (July 29). It was opposed by the 
Greens and Australian Democrats.

"Despite the rising premiums, the problems that practitioners are 
experiencing, and the loss of services in rural areas, the approach that 
this Bill encapsulates is the wrong way forward. [The Bill] unacceptably 
erodes the rights of the real victims  those who have suffered from the 
mistakes of health professionals", said Greens MLC Lee Rhiannon, speaking 
against the Bill.

"Let us not lose sight of the fact that the real victims are those who have 
gone to a hospital, or to see a doctor, assuming that they will be made 
well, but end up seriously injured or even worse."

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