Author: Erin Jeon, University of Manitoba Law Student
This is part two of a two-part series about improving access to justice for people impacted by medical malpractice. Part 1 discusses the numerous access to justice problems regarding medical malpractice. Part 2 discusses a possible solution to these problems in no-fault compensation.
Medical malpractice is a proven access to justice issue. Between the financial, temporal, and trial barriers, to the strength of the CMPA, the vast majority of malpractice victims do not receive compensation for the harm they have suffered.[1] Though a fault-based scheme is the system employed by Canada and the majority of the United States, jurisdictions such as Japan, Florida, Virginia, New Zealand, and Denmark all use some form of no-fault compensation for medical malpractice.[2]
No-Fault Medical Malpractice Compensation in Other Jurisdictions
No-fault malpractice schemes can be limited to certain injuries. In Virginia, Florida, and Japan, no-fault compensation extends only to obstetrical injuries, generally considered to be the most costly medical liability injury.[3] No-fault schemes can also be more comprehensive. For example, in Denmark, the avoidability rule replaces the negligence standard that exists in Canadian tort law.[4] If an injury could have been avoided under optimal circumstances, the patient is eligible for compensation. To fulfill the criteria, the patient must establish either that using a different treatment would have prevented the injury or that the best physician in the field would have acted differently.[5] This “exceptional physician” standard contrasts Canada’s “reasonable physician” standard in that the “exceptional physician” is a much more difficult standard for a doctor to meet.[6]
The Benefits of No-Fault Medical Malpractice Compensation
In Canada, the idea of no-fault compensation is tied to automobile accidents–regardless of who is at fault in an accident, each party’s own insurance will handle the claim.[7] Although insurers determine the extent to which each party is at fault (and a finding of fault can affect insurance premiums), no-fault insurance speeds up the claims process by avoiding the court system and gives more funds to the injured.[8] Similarly, in a no-fault medical malpractice compensation scheme, the injured party does not need to establish negligence on the physician’s part in order to succeed in a claim.[9] In each jurisdiction that employs no-fault compensation, meeting the threshold for eligibility is easier than it is in a fault-based jurisdiction.[10] Eliminating this barrier, with all the complexities of medical practice that need to be sorted out in court, is a significant step towards furthering access to justice.
There are several other benefits to no-fault compensation. No-fault schemes have significantly lower administrative costs. Denmark and New Zealand have administrative costs ranging from 10-20% of total system costs; in contrast, most fault-based schemes have administrative costs totaling 50-60% of their total system costs.[11] Low administrative costs make the system more affordable and allow for a higher percentage of costs to go towards compensating patients. There is also a significantly shorter time frame for receiving compensation in no-fault schemes. From the filing of a claim to the initial decision in Denmark and New Zealand, the waiting period is seven months and 37 days respectively; in Canada in the United States, the median time for reaching the resolution of a claim is approximately three years.[12] As a result of the short timelines of no-fault jurisdictions and the rehabilitative components that are often built into the schemes, patients tend to experience better health outcomes with no-fault compensation.[13]
Physicians in jurisdictions where there is no-fault compensation–and especially where the scheme is comprehensive–are strongly in favour of it. In New Zealand, 88.5% of physicians did not think that malpractice claims should be resolved in court, and the physician governing body in Denmark strongly supported no-fault compensation.[14] Physicians do not have to face the shame, guilt, and anxiety that comes with a lawsuit in a no-fault jurisdiction; rather, no-fault compensation frees physicians to support their patients as they make a claim.[15] Studies also show that the public in no-fault jurisdictions are in favour of the scheme: 54% of the New Zealand public had confidence in the scheme, while 75% of people who experienced the system were satisfied with the service they had received.[16]
The Drawbacks of No-Fault Medical Malpractice Compensation
As with any scheme, there are drawbacks to no-fault compensation. Patients receive a much smaller reward for succeeding in a claim in no-fault jurisdictions as opposed to jurisdictions with fault-based schemes. As of 2014, claimants in Denmark were awarded an average of US$40,000, while those in New Zealand were only awarded US$4,450.[17] These rewards have the potential to decrease with downturns in the economy.[18] In contrast, successful claimants in Canada and the US received a median of $215,700 and US$324,000 respectively in damages.[19] Furthermore, some no-fault schemes like that in New Zealand partly fund the scheme through general taxation; the public therefore pays some of the financial penalty for physicians’ mistakes.[20]
Those opposed to no-fault compensation schemes also argue that the deterrence effects produced in fault-based schemes are diminished or entirely eliminated in no-fault schemes.[21] Physicians in no-fault jurisdictions do not live under the threat of being taken to court for malpractice. However, there is little evidence that any deterrence effect produced by fault-based schemes improves patient safety.[22] Furthermore, in Canada, physicians pay yearly fees to the CMPA, which covers all costs related to malpractice lawsuits; therefore, although physicians still face the shame of a lawsuit, they do not face additional financial penalties.[23] Any potential lack of deterrence in a no-fault scheme can be somewhat combated by a strong complaint system.
In conclusion, no-fault medical malpractice compensation enables considerably more people to succeed in a malpractice claim, thereby increasing access to justice. The threshold patients must meet to succeed in a claim in a no-fault jurisdiction is much lower than in fault-based jurisdictions. Although injured patients may not receive as significant financial compensation in no-fault jurisdictions, their health outcomes are improved by the shorter timelines. There is also essentially no financial risk for patients in no-fault schemes–if the claim is unsuccessful, patients do not have to face paying for their own lawyer and possibly the costs of the opposing party. Because of the access to justice potential of no-fault compensation, a no-fault scheme should be considered in Canada for medical malpractice.
[1] Elaine Gibson, “Is It Time to Adopt a No-Fault Scheme to Compensate Injured Patients?” (2015-2016) 47 Ottawa L Rev 303 at 310-311.
[2] In total, ten jurisdictions around the world use no-fault compensation for malpractice to some extent: Denmark, Finland, Iceland, Norway, Sweden, New Zealand, Virginia, Florida, Japan, and France. Ibid at 317-318.
[3] Ibid at 322.
[4] Gibson, supra note 1 at 319.
[5] Ibid at 319-320.
[6] Erik S Knutsen, “The Medical Malpractice Landscape in Ontario: Facts, Trends and Analysis of Trials and Appeals” (2017) 47:2 Adv Q 131 at 141.
[7] Matt Hands, “How No-Fault Insurance Works in Canada” (22 November 2023), online: <ratehub.ca/insurance/car/no-fault-insurance>.
[8] Ibid.
[9] Gibson, supra note 1 at 318.
[10] See Gibson, supra note 1 at 319-323 for eligibility thresholds in each of the ten jurisdictions that use no-fault compensation.
[11] Gibson, supra note 1 at 327-328; Marie Bismark & Ron Paterson, “No-Fault Compensation in New Zealand: Harmonizing Injury Compensation, Provider Accountability, and Patient Safety” (February 2006), online (pdf): <commonwealthfund.org/sites/default/files/documents/___media_files_publications_in_the_literature_2005_feb_no_fault_compensation_in_new_zealand__harmonizing_injury_compensation__provider_accountability__and_890_bismark_no_fault_compensation_new_zealand_ha_0_pdf.pdf>.
[12] Gibson, supra note 1 at 332-333.
[13] Ibid at 336.
[14] Ibid at 333.
[15] Ibid at 334.
[16] Ibid at 334-335.
[17] Ibid at 327.
[18] Ibid at 336.
[19] It should be noted that average/median damages awarded in fault-based jurisdictions are inflated compared to awards in no-fault jurisdictions because only high-value claims are deemed worth pursuing in fault-based jurisdictions; however, if similar claims were made in both fault-based and no-fault jurisdictions, the reward in the fault-based jurisdiction would be larger. Ibid at 327.
[20] Bismark & Paterson, supra note 13.
[21] Ibid at 329.
[22] Ibid at 329.
[23] CMPA fees are based on the physician’s specialty; however, they do not increase if a patient makes a successful malpractice claim against the physician. Ibid at 329.