Helping journalists, producers and conference planners find the female guests, speakers and expert sources they need.

Medical insurance case no cause for concern

St. John’s Telegraph by Hilary Young 12 January 2016

In the 1990s, Shirley Shannon was sexually abused by her doctor, K.A. Akuffo-Akoto. The New Brunswick woman and her husband sued Dr. Akoto and the court found in their favour. As I tell my law students, however, winning your case does not mean you will get your money. Unfortunately for the Shannons, Dr. Akoto was no longer in Canada and he did not leave behind any assets that could be used to satisfy the judgment.

Last Monday, a New Brunswick court held that the Canadian Medical Protective Association (CMPA), an organization often compared to a malpractice insurer, did not have to pay the Shannons on Dr. Akoto’s behalf. (Full disclosure: I briefly worked as a CMPA lawyer.) As a result, some are questioning whether patients in New Brunswick are adequately insured against malpractice.

The court’s decision was, in my opinion, plainly correct and raises no significant concerns about whether there is adequate malpractice insurance in New Brunswick.

The CMPA did not have to pay the Shannons for several reasons. First, its policy is not to pay out in relation to deliberate unlawful acts, including sexual abuse. Second, it doesn’t pay out for acts that aren’t medical treatment. The CMPA considers that sexual abuse is not medical treatment.

The CMPA does defend doctors and pay out in relation to medical malpractice. This includes failing to properly diagnose a disease, improperly advising of risks associated with a procedure, and conducting a surgery improperly.

In the Shannons’ case, the court focused on whether the CMPA was an insurer, and found that it wasn’t. I think that’s a red herring. Even if the CMPA were an insurer, it wouldn’t have had to pay the Shannons because insurers generally exclude deliberate conduct from their coverage. Nothing in the law governing insurance would have required coverage for sexual abuse.

Following the court’s decision, the Shannons’ lawyer suggested that if the CMPA is not an insurer, New Brunswickers may think they’re protected when they’re not.

I don’t share this concern. All licensed doctors in New Brunswick have insurance or its equivalent – most through the CMPA. The CMPA has been defending medical malpractice claims and paying settlements and damages for more than a hundred years. In some ways, the CMPA covers more than insurance would – for example by not having limits on the amounts it will pay out.

If the CMPA pays out when patients establish they were victims of medical malpractice, the only remaining question is whether it’s a problem that this arrangement doesn’t extend to deliberate, non-medical acts such as sexual abuse. I don’t think it is.

Insurance is bought to guard against uncertain events: health problems, job loss, damage to a car in a crash or to a house in a storm. Insurance policies generally don’t cover injuries resulting from deliberate acts by the policyholder. An insurer isn’t going to pay out for a fire the policyholder started deliberately.

In my view, it is both unrealistic and undesirable for insurance companies, or the CMPA, to have to provide liability insurance against deliberate acts by the policyholder. Not only would such policies be prohibitively expensive, but liability insurance is primarily meant to protect policyholders by covering the cost of a lawyer and any damages awards against them. It is not primarily meant to protect those the policyholder injures. There is little need to protect policyholders against their own deliberate acts.

I suspect that something else was going on in the Shannon case. Although finding that the CMPA is an insurer wouldn’t have helped the Shannons (because insurers don’t have to pay out for deliberate misconduct), it would have been a game changer in Canadian medical malpractice litigation.

For example, if the CMPA were treated as an insurer, its business model would have to change. Eventually it would almost certainly set limits on the amounts it will pays out, as in the United States, which is not the case now. Another example is that the CMPA will often vigorously defend doctors it thinks have a good defence, even where it would be cheaper to pay a settlement. That could change under an insurance model. There are even implications for limitations periods. A limitations period is the time frame for bringing a case; if you bring it too late, your case may be dismissed. Because of rules that apply only to insurers, if the CMPA were an insurer it would be easier to avoid having a case dismissed because it wasn’t brought quickly enough.

This helps explain why the CMPA sent in one of its top lawyers to litigate the Shannon case. The court’s decision upholds the status quo in malpractice litigation.

Is it fair that the Shannons cannot collect on their more than $500,000 judgment? No, it’s not. Their lives have been forever changed by the despicable and unlawful acts of Dr. Akoto, and they’re left without legal recourse. It is impossible not to feel sympathy for them. But that does not mean that malpractice insurance (or its equivalent) should cover deliberate and illegal acts. Nor does it mean that there is a problem with the CMPA providing the equivalent of malpractice insurance in New Brunswick. As for the broader question of whether the CMPA should be an insurer? That is left for another day.

Hilary Young teaches in the Faculty of Law at the University of New Brunswick.