This paper updates Background Paper No 2/01, Medical Negligence and Professional Indemnity Insurance by Rachel Callinan. In early 2001 there were frequent media reports of a doctors’ crisis in NSW. Professional indemnity insurance premiums had risen substantially, attributed to an increase in medical litigation. The doctors’ crisis has continued since then, intensifying in late 2003, when more than 100 doctors in NSW and Queensland handed in their resignations, in protest of bills for the IBNR levy issued by the Commonwealth Government. The current furore over Camden and Campbelltown hospitals again brings issues of medical negligence to the fore.
This paper examines the many events that have occurred since 2001 that have had an impact on medical litigation. There have been numerous legislative changes in NSW, including an overhaul of health care and civil liability law. United Medical Protection (UMP), the principal medical defence organisation (MDO) in NSW, has entered provisional voluntary liquidation and emerged again, the first body to do so in Australian corporate history. The debate surrounding medical indemnity insurance has become a national issue, evidenced by the development of a comprehensive rescue package by the Commonwealth Government. The Negligence Review Panel, chaired by Justice Ipp, published its review of the law of negligence in 2002, with many of its recommendations subsequently implemented by the states, including NSW. Medical defence organisations are now required to operate as insurers under the supervision of APRA, rather than as mutual indemnity societies. This paper examines these changes, analyses the effectiveness of the reforms, and highlights the concerns that still exist.
Section 2 (pp 2-7) contains a timeline of events from 2001 onwards that have influenced both the shape and effectiveness of reforms.
Details of the reforms themselves may be found in section 3 (pp 8-19). It examines action taken by the NSW Government, from the Health Care Liability Act 2001, through the Civil Liability Act 2002, Civil Liability Amendment (Personal Responsibility) Act 2002, and Civil Liability Amendment Act 2003 . This section also discusses the findings of the Negligence Review Panel published in the Ipp Report. The extent to which the Panel’s recommendations have been implemented in New South Wales is noted.
The Commonwealth Government has developed an extensive medical indemnity rescue package. Section 4 (pp 20-24) explores the details of this package, paying particular attention to the IBNR Scheme and the controversy which surrounded it. It also discusses the findings of the Medical Indemnity Policy Review Panel and the extent to which the Commonwealth Government has accepted the Panel’s recommendations.
Section 5 (pp 25-31) includes an overview of the approach taken by other countries toward medical negligence, including New Zealand, the United Kingdom and the United States of America. Details of New Zealand’s no-fault compensation scheme are provided.
The effectiveness of the reforms is discussed in section 6 (pp 32-38). It explores such questions as what was driving the rise in insurance premiums, has anything changed, as well as highlighting some of the concerns that remain.
The recommendations of the Negligence Review Panel are included as Appendix A. The recommendations of the Medical Indemnity Policy Review Panel are located in Appendix B.