In August 2012, the Australian Institute of Health and Welfare
released the latest in a series of reports on medical indemnity
claims in the public and private sectors. The report examined
claims made, current or finalised, in the 2010-11 period.
Errors in procedure represented the highest proportion of claims
(nearly 26%), followed by errors in diagnosis (20%) and errors in
treatment (16%). In terms of medical specialties, procedural errors
contributed to the bulk of claims against gynaecologists (67%),
general surgeons (58%) and orthopaedic surgeons (61%). Diagnostic
errors were the most common source of claims against emergency
The data also revealed a statistically significant increase in
large claims. While claims settling for over AU$500,000 accounted
for 2% to 3% of settled claims in the previous reporting period,
the percentage nearly tripled to 8.7% during 2010-11.
COMMON LAW DEVELOPMENTS
In October 2012, the High Court granted special leave to appeal
against the New South Wales Court of Appeal's decision in
Wallace v Kam  NSWCA 82. The decision concerned
whether a doctor is liable to a patient who has suffered an injury
as a result of an inherent risk of a procedure if the patient would
not have consented to undergo that procedure if he or she had been
warned of a risk of different injury that never actually
Dr Kam had performed a lumbar fusion and pedicle screw fixation
on Mr Wallace. Mr Wallace suffered local nerve damage as a result
of the surgery, which was an inherent risk of the procedure.
The trial judge found at trial that Dr Kam had negligently
failed to warn Mr Wallace of the risk of the local nerve damage
(which he suffered) and had also failed to warn him of a 5% risk of
paralysis (which he never suffered). However, Mr Wallace could not
prove that he would have declined the surgery had he been warned of
the risk of local nerve damage. While Mr Wallace would not have
agreed to the surgery if he had been warned of the 5% risk of
paralysis, the trial judge decided that, because Mr Wallace had not
suffered paralysis, Dr Kam's failure to warn him of the risk of
paralysis was not causally relevant to his loss. Mr Wallace's
claim was therefore dismissed.
On appeal, Mr Wallace argued that his injury was caused by Dr
Kam's negligent failure to warn of him of all the material
risks associated with the surgery. Mr Wallace contended that if had
he been warned of both risks, particularly the risk of a
catastrophic outcome of paralysis, he would not have undergone the
surgery. The Court of Appeal dismissed the appeal and affirmed the
trial judge's finding that Dr Kam was not liable as a result of
failing to warn Mr Wallace of a risk that did not materialise.
A successful High Court appeal has the potential to
substantially increase the number of claims that can be made
against health care providers. It raises the potential for
plaintiffs to "shop" for risks they were not warned of
but would nonetheless have been significant in their decision
making, even though the risk never eventuated. However, based on
the recent trend in the High Court's decisions involving
medical negligence cases, insurers probably need not take steps at
this stage to rate their premiums based upon the potential for the
appeal being allowed.
This publication is intended as a general overview and
discussion of the subjects dealt with. It is not intended to be,
and should not used as, a substitute for taking legal advice in any
specific situation. DLA Piper Australia will accept no
responsibility for any actions taken or not taken on the basis of
DLA Piper Australia is part of DLA Piper, a global law firm,
operating through various separate and distinct legal entities. For
further information, please refer to www.dlapiper.com
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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