THE vast majority of doctors who face a medical indemnity claim will not end up in court, new data on claims from 2008–09 show.

The figures on public and private sector medical indemnity claims show that only 6% of claims were finalised through a court decision, while 29% were settled through negotiation with the claimant and 65% were discontinued. (1)

Dr Sara Bird, manager of medicolegal and advisory services at MDA National, said the reported low rate of claims going to court was consistent with experience at MDA National.

“That happens partly because doctors don’t want to go to court … also, courts want the parties to resolve the matter before it proceeds. Often both parties will be willing to compromise”, she said.

Discontinued claims included those withdrawn by a claimant or closed by a claims manager due to long periods of inactivity. Discontinuation was rare for larger claims — only 8% over $50 000 were discontinued, and 2% of those over $500 000.

Lisa Clarke, general manager of claims at Avant, said the results regarding resolution and discontinuation of complaints were generally in line with Avant’s experience.

“Avant’s experience is relatively consistent, in that for claims over $100 000, we achieve resolution by way of a negotiated settlement in about 90% of cases, with about 5% being resolved by the courts and about 5% being discontinued”, she said.

Dr Bird said the overall rate of discontinuation of cases reported was higher than her experience.

Bill Madden, a lawyer with plaintiff law firm Slater & Gordon, agreed; however, he said the majority of medical complaints brought to his law firm were not pursued.

“The great majority of people who contact us, we are not able to help them … patients may have had a bad outcome but it may not be something that can be upheld as a claim in negligence”, he said.

The report, by the Australian Institute of Health and Welfare, also found that two-thirds of claims were settled for less than $10 000, including 30% where no payment was made.

About 70% of closed claims had been finalised within 3 years of being opened, while 9% of closed claims had taken more than 5 years to settle.

Dr Bird said the length of claims rang true with her experience.

“One of the most difficult things for doctors to manage is the stamina … it’s a long time to have it hanging over your head”.

AMA president Dr Steve Hambleton said that all claims, big or small, were stressful for doctors.

“Almost every doctor experiences a claim against them at some stage in their medical career. Every claim is a concern, and it is always very stressful for the doctor, regardless of whether it is withdrawn at some stage or results in a court decision, and regardless of the amount of the payout”, he said.

“The discontinued claims are just as stressful but the stress is over quicker, as … court cases can take years.”

– Sophie McNamara

1. AIHW 2011; Public and private sector medical indemnity claims in Australia 2008-09

Posted 26 September 2011

2 thoughts on “Few indemnity claims go to court

  1. Anonymous says:

    Too many cases not defended, leads to a feeding frenzy by lawyers and patients. No wonder medical indemnity premiums have sky rocketed! Too many settlements out of court by far! Not just the Medical profession unjustly targeted!

  2. Dr Paul Nisselle says:

    I wonder where ‘anonymous’ has been for the last ten years!! I wonder of he or she has paid a medcial indemnity premium in that time!
    Tort reform has substantially reduced the number of small claims (the ones with disproportinately high legal expneses). The claims subsidies provided direct by government have substantially taken the sting out of high claims (ie, >$300K). The Australian conditional fee system has substantially reduced the number of low chance claims being brought speculatively. Under the Australian conditional fee system, lawyers, if their client wins the case, get paid according to a specified fee schedule (with a relatively modest success ‘uplift’ added) unlike, eg, in the US, where they get 30-40% of the award or settlment made to the plaintiff. That gives lawyers in the US a much greater incentive to take on speculative cases. In Australia, plaintiff lawyers working on a conditional fee basis will only take on cases with a high probability of success. They cannot afford to have too many losers. That means the MDOs are not having to absorb costs associated with patients who discontinue their claims. Overall, the rate of growth of costs incurred by MDOs has flattened substantially since the peaks of the 1990s – and this has been reflected in the much flatter growth (reduction for some disciplines) in medical indemnity insurance premiums since 2003-2004.
    Having worked for a number of MDOs in Australia between 1989 and 2009, I know that we do not settle for commercial expediency. We settle when we believe there is a significant probability that the plaintiff will win if the case goes to trial. We make no offers if we believe the plaintiff is unlikely to be able to prove his or her case. Every sentence in Anonymous’ coment is just wrong!!

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