No express provisions for exclusion of liability of a supplier of services
The Consumer Protection Act, not yet in operation, significantly affects the hospital/patient relationship. The Act’s broad definition of consumer services means that a patient will be considered by the Act to be a consumer for the purposes of legislation.
Services includes but is not limited to work or any undertaking performed by a person for the direct or indirect benefit of another and irrespective of whether the person promoting or offering to provide the services participates in, supervisors or engages directly or indirectly in the particular service.
The purpose of the Act is to promote and advance the social and economic welfare of consumers in South Africa.
The member of the Cabinet responsible for consumer protection matters may prescribe a category of consumer agreements that are required to be in writing. Whether hospital/patient agreements will fall within that category remains to be seen.
Where there is an agreement in writing as prescribed or on a voluntary basis, that agreement:
- Applies whether or not it is signed by the patient. The patient must be provided with a free copy of the agreement.
- Must set out an itemised break-down of the patient’s financial obligations under the agreement;
- Must be in plain language, if no form has been prescribed for the agreement. The Act says that an agreement is in plain language if:
- It is reasonable to conclude that an ordinary consumer of the class of persons for whom the notice, document or for whom the agreement is intended, with average literacy skills and minimal experience as a consumer of the relevant services, could be expected to understand the content, significance and import of the notice are of the agreement without undue effort, having regard to:
- Context, comprehensiveness and consistency;
- Organisation, fall, form and style thereof;
- Vocabulary, usage and sentence structure;
- The use of illustrations, for example, headings or other aids to reading and understanding.
- Guidelines may be published in respect of the above.
- Where an agreement is not in writing, a hospital will have to keep a record of the transaction entered over the telephone or on a recordable form, as prescribed.
- We will wait and see whether a hospital/patient contract is required to be in writing. If not, doctors who, nevertheless, voluntarily contract in writing need to ensure that the contract complies with the provisions of the Act and the regulations, referred to above.
- Any agreement with the patient whether in writing or not, may not purport to:
- Limit or exempt the hospital from liability for any loss directly or indirectly attributable to gross negligence of the hospital or any person acting on their behalf;
- Constitute an assumption of risk or liability in that regard;
- Waive or deprive a patient of a right in terms of the Act;
- Avoid the hospital’s obligations or duties in terms of the Act.When a hospital undertakes to provide any services, the patient has the right to the:
- Timely performance and completion of the services;
- Timely notice of any unavoidable delay in the performance of the services;
- Performance of the services in a manner and quality that patients are generally entitled to expect;
- The use, delivery or installation of goods that are free of defects and are of a quality that patients are generally entitled to expect of the goods are required for performance of the services.
- The latter is of significance in the case of medical implants and the right to the use of safe medical equipment in any treatment.
- If the hospital does not perform a service to the standards contemplated above, then the patient may require the hospital to remedy any defect in the quality of service performed or refund to the patient a reasonable portion of the price paid for the services performed (and any goods supplied), having regard to the extent of the failure.
It is debatable whether many provisions of the Act are appropriate to the doctor/patient relationship.
The Act does allow for a regulatory authority such as the Health Professions Council of South Africa to apply to the relevant Minister for an industry-wide exemption from one or more provisions of the Act on the grounds that those provisions overlap or duplicate a regulatory scheme administered by that particular authority in terms of other national legislation.
Doctors should consider, perhaps via the representative bodies, whether any regulatory schemes overlap or duplicate the provisions of the Act to found a basis for successful applications for exemption.
Of particular significance in the context of medicines, prosthetics, implantations and the use of medical equipment are the provisions of the Act which now impose a no-fault regime of product liability.
The Act does provide that in the case of goods supplied within the republic to any person in terms of transaction, even if the transaction is exempt from application of the Act that the goods of the importer, producer, distributor and retailers of the goods would still be subject to the no-fault regime provisions.
It is likely for example that an exemption from provisions of the Act is obtainable insofar as disciplinary procedures under the Health Professions Act and its regulations in respect of doctors who already provide an appropriate forum for professional complaints.
In terms of those provisions, the producer, importer, distributor or retailer of any goods is liable for any harm caused wholly or partly as a consequence of supply and any unsafe goods, product failure or defect or hazard in the goods or inadequate instructions or warnings provided to the patient pertaining to any hazard arising from or associated with the use of any goods.
That is irrespective of whether the harm resulted from any negligence on the part of those persons.
A supplier of services (such as a doctor) who in conjunction with the performance of the services applies, supplies, installs or provides access to any goods is regarded as a supplier of those goods to the patient for the purpose of the section.
The significance of this recordal is not clear. Presumably, the intention is to indicate liability on the part of that supplier, equivalent to the no-fault liability imposed on a producer, importer, distributor or retailer.
The Act, however, defines a supplier as a person who markets any goods and services producers, importers, distributors and retailers are separately defined, which definition includes for some of the persons the promotion and supply of goods as understood by the term market.
If a Court interprets the concept of supply of services in the context of the no-fault provisions to attract a liability equivalent to that of producers, importers, distributors or retailers, then for example, in the case of a medical device implanted in a patient which is defective and causes harm to the patient, the patient has the right to recover not only on a no-fault basis from the producer, importer, distributor and/or retailer of that particular medical product but also the surgeon who implanted the product.
All the patient need do is prove the harm as defined to have been caused by the defective implantation. It would not be necessary to prove negligence on the part of the surgeon or any of the other role-players.
There are only limited grounds of exclusion of liability.
There are no express provisions for exclusion of liability of a supplier of services, unless one considers the supplier’s position to be analogous to that of a distributor or retailer. In that situation, in the case of a surgeon, liability may be avoided if it is unreasonable to expect the surgeon to have discovered the unsafe product characteristic, failure, defect or hazard, having regard to that person’s role in marketing the goods to the patient.
Depending on a doctor’s/hospital’s role in supplying a particular product, the doctor may of course be classified as a distributor or retailer as defined by the Act.
Hospitals/doctors also need to be aware of the over-booking prohibitions under the legislation.
A hospital/doctor may not expect payment or any consideration for services if the doctor has no reasonable basis to assert an intention to supply those services or intends to provide services that are materially different from the services in respect of which payment for consideration is accepted.
If a hospital/doctor makes a commitment or accepts a reservation to provide the services on a specified date or time (the situation most commonly arises in the case of the surgeons’ list) and on the date and time contemplated fails to because of insufficient capacity to supply the services or similar services or same or better quality, class or nature, then the doctor must:
Refund the patient the amount of money paid in respect of the commitment or reservation together with interest at the prescribed rate for the date at which the amount was paid to date of re-imbursement;
In addition, compensate the patient for costs directly incidental to the hospital’s/doctor’s breach of the contract, except in circumstances where shortage of capacity is due to circumstances beyond the hospital’s/doctor’s control and the hospital/doctor took reasonable steps to inform the patient of the capacity problem as soon as practical in the circumstances.
While the particular section records as a defence to any alleged failure to supply services an offer to procure another person to provide the patient with comparable services, and the offer is accepted, or unreasonably refused, in the circumstances of a patient/doctor relationship the identity of the particular doctor would most likely be significant to the patient.
Accordingly, while there may be another surgeon available to provide the surgery a parties’ refusal to undergo surgery by another may not be unreasonable.
In those circumstances, there will still be exposure of the doctor to the claim for, not only the refund of any fees paid, but for compensation for costs directly incidental to the breach.
Those incidental costs would include, for example, loss of income, where a patient has taken off work to undergo surgery which is then cancelled.
The good news for doctors is that section 17 of the Act provides that while a patient has a right to cancel any advanced booking or reservation for services, the patient who does so and makes the commitment may be required to pay a reasonable deposit in advance.
The hospital/doctor may also be entitled to impose a reasonable charge for cancellation of the order or reservation. That cancellation fee cannot be imposed if the patient cannot honour the booking because of death or hospitalisation.
The cancellation fee would be unreasonable if it exceeds a fair amount in the circumstances, having regard to the nature of the services reserved, the length of the notice of cancellation and the reasonable potential for the hospital/doctor acting diligently to find an alternative patient between the time of receiving the cancellation notice and the time of the cancelled reservation and the general practice in the relevant industry.
The no-fault provisions of the Act will certainly facilitate litigation in the medico-legal field.
Previously, patients had the hurdle of proving negligence of the product supplier and that is now removed. In those circumstances, successful claims and litigation against manufacturers and suppliers of pharmaceutical products, for example, are likely to increase.
Those role-players in the medical industry which have a significantly increased exposure to liability in consequence of the no-fault provisions of the Act will need to ensure that by have in place appropriate product liability insurance to cover both the risk events and the quantum of damages of claims which may arise.
The question of claim, for example, for serious neurological injury caused by defective medication to a young middle-class patient who is rendered unable to care for themselves, or to earn an income, would be in the region of R10 million to R20 million excluding legal costs.
It is important to ensure that having regard to the limits of indemnity of any insurance, that the insurance provides adequately for legal costs both in respect of any claimant and defence costs.
On a similar basis, doctors need to review their medical malpractice insurance and ensure that it includes appropriate cover for the product liability exposure which is now created under the Act.
Donald Dinnie is a Director, Deneys Reitz Inc