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22 July 2019 | Comment | Article by Ruth Powell

Do I have a right to compensation if the doctor who committed negligence is not insured?

This question became a hot topic in 2017 when it emerged that the private patients of disgraced breast surgeon Ian Paterson may not be entitled to any form of compensation. In 2017, Paterson was convicted of intentionally wounding his patients by exaggerating or inventing their risk of cancer in order to perform unnecessary surgery. Paterson’s NHS patients were entitled to compensation on the basis that Paterson was an NHS employee and thus benefitted from the NHS indemnity. Paterson’s private patients’ entitlement to compensation, on the other hand, was less clear.

Doctors practising in the private sector operate as contractors; the burden therefore falls on the doctor to ensure that they are insured. Although it is a legal requirement of registration that all regulated healthcare professionals practising in the UK hold appropriate indemnity arrangements in respect of their practice, if the doctor is held to have acted criminally, the insurance can be invalidated leaving the patient with no right to recover compensation for any injuries suffered as a result of any negligence. In the Paterson litigation, Spire Healthcare eventually reached an agreement with patients to pay compensation for their injuries, together with Paterson’s insurers and the Heart of England NHS Trust.

Although a resolution was reached in the Paterson cases, the right for patients to receive compensation in the private sector remains flimsy.

The starting point is usually the doctor’s individual indemnity and not the private hospital. However, as we saw in the Paterson litigation, a doctor’s Medical Defence Organisation (MDO) is entitled to refuse indemnity; this could vary from case to case but could range from criminal activity by the doctor to financial difficulty of the provider. The frightening fact of the matter is that the MDO’s cover is discretionary which means that there is no contractual obligation by the MDO to meet the cost of any claim against the professionals which they cover. In the absence of any insurance, if the patient were to proceed with a claim against the uninsured doctor directly, they would be obliged to claim against the doctor’s own assets which could be insufficient particularly if there are a number of patients claiming against the same doctor. Whereas the government ensures that victims of uninsured or hit and run drivers are appropriately compensated, there is no equivalent system currently in place in respect of patients bringing clinical negligence claims against uninsured doctors.

If it is not possible to recover compensation from the doctor directly, there are a number of other ‘back up’ options potentially available.

Negligence claim against the private hospital

As we saw in the Paterson litigation, patients can seek to argue that a private hospital is either vicariously liable for the acts or omissions performed by the doctor and/or that the hospital owed a “non-delegable” duty of care to the patient in relation to the provision of medical treatment. However, the tests applied by the Court to show that a hospital was either vicariously liable and/or owed a non-delegable duty of care to the patient are complex and often result in protracted litigation.

Breach of contract claim against the private hospital

Subject to the terms and conditions which the patient would have signed prior to receiving treatment, a patient may have entered into a contract with the private hospital. In these circumstances the patient can claim compensation against the private hospital itself on the basis that the private hospital was in breach of its express or implied terms, for example, to exercise reasonable skill and care in treating the patient. Patients may be able to recover damages for pain and suffering as well as any other specific losses incurred as a result of the breach. In the alternative, the patient may be able to claim a full refund of the price paid for the surgery or treatment. This remedy can be problematic if, for example, the private hospital no longer exists and/or the hospital’s insurers refuse indemnity by applying an exclusion clause.

Claim against the credit card company

Under section 75(1) of the Consumer Credit Act 1974, if a patient has part paid or fully paid for treatment using a credit card (the patient will have needed to have paid £100 – £30,000 on their own or their joint credit card), then the credit card company will be jointly and severally liable with the party which the patient contracted with (this would usually be the private hospital). The patient can recover the same damages that he/she would have done under a breach of contract claim i.e. damages for pain and suffering as well as any other specific losses incurred as a result of the breach. This can be a useful remedy if, for example, the private hospital ceases to exist or if the private hospital’s insurers refuse indemnity.

Practical Advice

If you take away one thing from this article, always ensure that you pay for any medical treatment you undergo using your own credit card. If your credit card limit is insufficient, you should always ask to make part of the payment of at least £100 by credit card to ensure that you are afforded the rights under the Consumer Credit Act 1974.

What does the future hold?

Earlier this year the government launched a consultation to consider whether the law should be changed to ensure that cover provided by discretionary indemnity providers should be regulated. The key objectives of the consultation were to ensure that patients can access appropriate compensation and that healthcare professionals are not personally financially exposed to individual claims. We welcome the government’s consultation on this subject and await the outcome with interest.

Hugh James is ranked in the top tier for our expert clinical negligence advice by both major legal guides Chambers and Partners UK and The Legal 500. Visit the Medical Negligence page for more information or to get in touch.

Author bio

Ruth Powell


Ruth is a Partner and Head of our Clinical Negligence Department. She has exclusively practised in clinical negligence since qualifying in 1995 and has a wealth of experience in complex and high value clinical negligence claims.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.


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