Medical Negligence

The Compensation cap in Medical Negligence: critical issues to reckon with

An established part of patients’ rights in the Indian legislation today is the right to complaint and seek redressal through the Consumer Protection Act (CPA) 1986 for any deficiency in service, breach of duty in medical services or negligence leading to damage or loss of life. In the absence of any recognition of the patients’ bill of rights as such, this Act stands as disciplinary safeguard against malpractice in medicine. But medical fraternity has always contested the inclusion of medical negligence under the CPA and compensations awarded also have been a contentious debate and recently have come back in the limelight following a demand to the Health Ministry by the Indian Medical Association to cap the amount of compensation that can be awarded under Consumer Protection Act for medical negligence. This is in response to the Supreme Court judgement in 2013 of Kunal Saha Vs --- awarding 11 crores in compensation including interest to Dr. Kunal Saha for the death of his wife Anuradha Saha in 1998 to be paid by 4 doctors and the hospital that has created quite an uproar in the medical fraternity.

IMA with a petition signed by 50,000 doctors all over the country has threatened to go on Satyagraha if their demand on amendments to CPA for capping compensation amount along with other 4 demands are not met by the Health Ministry. The Health Ministry after meeting with IMA members has decided to form a committee to look into the matter and respond in six weeks time. Until that time, the Satyagraha has been postponed by the IMA awaiting the response from the Ministry. Meanwhile, IMA has also sent out a white paper on capping compensation amounts on medical negligence cases. The move has received considerable criticism from patient groups like People for Better Treatment (PBT) for making the doctors further immune from legal culpability. Please find the link of the white paper by IMA and the PBT website for further information.

Medical Negligence under Consumer Protection Act: what is the status?

The debate about amount of compensation has grown considerably in the recent years as medical negligence essentially comes under the Law of Torts, which has been developed over the years through judgements passed in similar cases. It is not based on any Act of parliament, but builds on the reference of previous cases. This means that there is no criteria set by the law on quantum of compensation to be awarded but largely results from judgments that set an example over time. And hence, the argument by IMA (Indian Medical Association) is that following the case where large compensations are awarded will become a trend in other cases more and more.

However, law has placed numerous safeguards to prevent frivolous cases against doctors. Firstly, the onus of proving that the medical negligence has occurred is placed on the victim except in the case of res ipsa loquitur i.e. the thing speaks itself. Here the event itself is evidence enough of negligence for e.g. operation on the wrong eye or leaving behind surgical instruments in the patient’s body etc. The part to remark is that to prove medical negligence, the victim has to produce solid evidence which includes the medical records, investigation reports, hospital records etc. And all these evidences are created by the doctors themselves and within their control. A number of negligence cases are quashed for lack of evidence and many more may not be reaching the consumer court at all. Secondly, if a case is found to be frivolous by the court, it is dismissed and the complainant has to pay upto Rs.10,000 to the defendant. But most of the negligence cases filed take more than a decade to resolve and this may be a deterrent enough for frivolous cases as well as genuine ones.

A quick analysis of judgements by Maharashtra State Consumer Redressal Commission by CEHAT in 2015 shows that out of 11 consumer complaints (CC) filed for medical negligence, only half the cases were proved and the compensation was awarded in the range of 6 lakhs – 16 lakhs. The highest compensations were for death due to negligence as compared to disability and greater for victims with younger age. Each of these cases was more than a decade old with a range of 13 years to 20 years which is evidence of the long struggle that patients/families have to endure. The Compensation awarded was under various heads, including Medical costs, income loss, mental trauma, disability costs, loss of maternal love in the case of death of a mother, litigation costs etc. based on the facts of the case. Here again, it was seen that the quantum of compensation is limited by the proofs that the complainant can submit regarding income loss, expenditure and such, failing which an arbitrary amount may be granted.

How is ‘just’ compensation calculated?

The amount of ‘just’ compensation to be granted under CPA does not have any set criteria, is complex and varies on case by case basis. That is why it is inconsistent across various judgements in various consumer fora. The object of compensation is to make good the loss suffered by the complainant and will also depend on the extent of damage or loss of life and the gravity of negligence. One can generally classify the compensation under:

  1. Economics damages: include medical costs incurred or to be incurred in case of disability, loss of earnings and cost of litigation;
  2. Non-economic damages: mental agony and pain, loss of consortium, loss of maternal love (in case of death of young mother) etc

While rate of inflation may not be directly included, there is an “appropriate” rate of interest of usually about 6-10%. Only occasionally, punitive damages are imposed for gross negligence on part of the attending doctor. Most of the times, it’s an arbitrary lump sum amount and sometimes, through a calculation.

A commonly used multiplier method for calculating loss of earnings typically considers,

  1. Age – the difference between the expected years of life as per the life expectancy tables and the age at the time of death. The health of the victim and the years he/she would have been unproductive are also taken into consideration.
  2. Income – the difference between the total earnings and the expenditureof the victim on himself/herself
  3. Number of dependants of the patient and the prospects of a bright future may also be given weight.

To further read about the debate around compensation and methods used, please refer the following article.

Agarwal, Anurag K, (2014) Medical Negligence and Compensation in India: How Much is just and Effective?, Indian Institute of Management Ahmedabad, W.P. No. 2014-03-27

Comparing with the US medical malpractice system: Do they really have the best solution?

Comparisons have been drawn with the medical malpractice systems in other developed countries especially United States where tort liability system similar to the Indian system exists. Since, medical malpractice is a state subject in US, all states have different laws and procedures where medical malpractice laws have been amended over the time and under significant influence of physician lobbies. Caps or limits on compensation amount to $2,50,000 in numerous states of US have been cited by the doctor bodies to make the case for similar amendments in the Indian law. But this argument is a misrepresentation of facts when for majority of the US states, the compensation caps are only for non-economic damages of mental trauma, pain and agony caused or punitive damages. While only a handful of states have an overall damages cap of ranging from $500,000-$2,000,000, some states have patient compensation/ insurance funds to reduce the burden on individual medical personnel. Three states consider any cap on compensation as constitutionally prohibited. Thus, in US the caps are only on part of the total sum awarded, at a higher range and there are many other provisions to make sure that the victim gets fair compensation. More information about the laws around medical malpractice in US can be found at the following link:

But the actual benefit of compensation caps in US is a highly debatable issue with most research only showing a reduction in indemnity policy insurance premiums over time with variable amount of change. The effect of these damage caps on defensive medicine, physician supply, healthcare costs are quite unclear. Studies also show evidence that the actual number of claims filed for medical negligence is far less than the actual cases occurring and that the chances of a frivolous case being awarded compensation are very low compared to a genuine case being rejected.

Considering all these factors and the fact that health care system in US is far more regulated than in India, how such a reform would play out in the Indian scenario is uncertain. Also, the claim of rising burden of high compensations seems an exaggeration to create fear and panic. The curtailment of patients’ right to adequate compensation without ensuring patient safety through regulations and setting of standards of care seems very unjustified.

Compensation caps benefits whom: the healthcare, the victim, the doctor or the insurer?

The example of US has clearly shown that compensation caps are not really going to solve all the problems of the healthcare system including defensive medicine, supply of doctors or cost of health care. The IMA demands have not been substantiated adequately with any kind of solid evidence that support the compensation trends are having adverse effect on cost of healthcare or that implementing caps would have any beneficial effect for the patients or even health care costs. Nor can one understand the claim that having a compensation cap will reduce the inequity in health access between rich and poor people.

None of the demands talk about evolving patient safety measures or quality assurance or even patient-centred care in the Indian health care system. In India, in a doctor-patient relation, the doctor has always been in a superior position as the holder of knowledge and skill that the patient requires to reduce his physical agony and protect his life. The deteriorating physician-patient relationship in the current scenario is evidence that problems run deep in the health care system and not altogether divorced from the corruption that has spread. Please read the following article to know more about the compensation cap debate in India.

Saha, Kunal and Devi Shetty, (2014) Are large compensation payouts for negligence good for medicine in India?, Bristish Medical Journal 2014;349:g5229

One understands that doctors have problems in their profession too starting from costly and poor quality education to overwork and stress. But the question begs itself to quiet reflection for a moment. What is really the cause of these problems and whether having such superficial measures would really solve them? Whether as the leading body of a noble profession with considerable influence in policy, have we done enough to drive positive initiatives towards solving these problems?

Further links/readings:

Yadav, Mukesh and Pooja Rastogi, (2015) A Study of Medical Negligence Cases decided By the District Consumer Courts of Delhi”, Journal of Indian Acadedmy of Forensic Medicine, Jan-March 2015, Vol. 37, No. 1