Soaring medico-legal claims against state hospitals: Courts may consider forms of compensation other than lump-sum payments

Courts must be allowed to consider ordering alternative compensation — other than one lump-sum payment — for those injured through medical negligence, the Constitutional Court ruled last week.

Given evidence placed before it by four provincial MECs for health, Justice Mbuyiseli Madlanga said arguing that the country’s courts must stick to ordering lump-sum payouts only, might undermine the public’s right to healthcare.

In a previous ruling in 2020, the court found there was a need to develop two common-law rules: The “once-and-for-all” rule and the rule that damages for medical negligence must be paid in money.  

“Such development would, first, allow compensation by the provision of physical items or medical services in the public healthcare sector instead of money (the so-called public healthcare defence), or, second, allow for the making of an undertaking ‘according to which medical services or supplies that cannot be provided in the public healthcare sector are paid for when they arise in the future’ (the undertaking-to-pay defence).”

While the court did not, back then, make a finding on the facts of the case before it, the justices did find that “where “[f]actual evidence to substantiate a carefully pleaded argument for the development of the common law” is properly adduced and “sufficiently cogent, it may well carry the day”.

The appeal that came before the court in 2021 was brought by the Gauteng MEC for health and was heard on written submissions only.

The application was joined by three other MECs for health from the country’s provinces that have been hardest hit by medico-legal claims — the Eastern Cape, KwaZulu-Natal and the Northern Cape.

The Eastern Cape health department is facing the largest share of legal claims — R37-billion. The Gauteng department of health is facing claims amounting to R21.2-billion. 

According to statistics released in 2020 by national Minister of Health Dr Zweli Mkhize, the KwaZulu-Natal department faced 846 claims totalling R8.5-million (for the two financial years ending in 2019) and the Northern Cape, 42 claims of R491-million.

Madlanga, writing on behalf of the court, issued an order that in the specific appeal before the court, the high court has not been barred from considering whether the common law will allow compensation in a form different from the immediate payment of a lump sum.

The case involves damages of R32-million claimed by the mother of a child who has cerebral palsy after suffering a birth injury at a public hospital in Johannesburg.

The court issued an order that the Gauteng Department of Health was responsible for 100% of the damages suffered by mother and child. 

The MEC for health in Gauteng then applied for their plea to be amended in the case currently before court to raise the public healthcare and undertaking to pay defences.  

“In other words, he sought the development of the common law,” Madlanga said.

The legal team for the mother and child, however, argued that the matter had already been decided as a judge had found that the department was liable to “pay” 100% of proven damages. 

The Gauteng High Court dismissed this objection, ruling that “pay” merely referred to compensation.

On appeal, the Supreme Court of Appeal overturned this ruling, finding that the mother and child were entitled to [a lump sum] payment for 100% of their damages and ordered that the high court was precluded from ordering that compensation take the form of services, or the provision of medical and related items, or to pay the amount of money in future as and when the need arose.

Madlanga said the focus had to be on being liable to compensate.

 “This court has already confirmed that the common law may, with the support of ‘[f]actual evidence to substantiate a carefully pleaded argument’, be developed by a court to allow for the public healthcare and undertaking to pay defences,” he said.

“An interpretation precluding the applicant from leading evidence to support a development of the common law implicates his right of access to courts, which includes the right to have a dispute decided in a fair public hearing.  

“It is also worth considering the possible implications on the right of everyone to have access to healthcare services and of every child to basic healthcare services,” he said. 

Madlanga said the legal team for the MEC for health in the Eastern Cape, Nomakhosazana Meth, pointed out that these types of claims were constantly on the increase.  

“The result is that, instead of funding healthcare programmes and facilities, a large portion of her department’s annual budget is allocated to medico-legal liabilities,” he said.

He said that developing the common law to include services, pay-as-needed arrangements and medical supplies instead of a lump sum payment did not mean that the interests of the injured parties “must be relegated to insignificance”.

“Each must be afforded an appropriate remedy and compensated fairly for loss suffered.”  

He said the MECs for health should, however, be allowed to lead evidence on the desirability and practical implications of a development of the affected common law rules. DM/MC