Who bears the risk? Liability for surgery in the private sector

During these Part 8 proceedings for declaratory relief, the scope of the contractual obligations undertaken by the Defendant, Circle Health Group Limited, were considered at length: specifically, could the private healthcare provider be deemed to be contractually liable for the acts and omissions of its self-employed consultants?

Background

In 2015, the Claimant underwent a hip resurfacing procedure at one of the Defendant’s hospitals. The surgery was performed by consultant orthopaedic surgeon Mr Derek McMinn and anaesthesia was administered by consultant anaesthetist Dr Malligere Prasanna (“the Consultants”). Both of the Consultants practised at the Defendant’s hospital pursuant to practising privileges agreements. 

As a result of complications which arose during the surgery, the Claimant sadly suffered a brain injury for which he wished to make a claim for clinical negligence. Claims were intimated against the Defendant, Mr McMinn and Dr Prasanna. Pre-action, Dr McMinn denied liability. The Defendant also denied liability for the same reasons that form the basis of their defence to the claim for declaratory relief. For reasons which aren’t explained in detail in this article, Dr Prasanna had no representation from an insurer or indemnifier. 

In view of the challenges the Claimant faced in bringing his claim against the Consultants, he sought a declaration as to the scope of the contractual obligations owed to him by the Defendant.

The Claimant averred that the Defendant was contractually responsible for the surgical and anaesthetic services provided by the Consultants. Whilst the Defendant accepted that it was responsible for a range of services provided to the Claimant in ‘association’ with the surgery (i.e., nursing services and the provision of food, accommodation, and the relevant facilities), it denied that it was responsible for the provision of services by the Consultants. 

The Contract

The parties agreed that the contractual documents (“the Contract”) consisted of a covering letter, a quotation for the surgery and the Defendant’s Self-Pay Terms and Conditions (“the Terms”). These documents were considered in some detail and the notable issues were: 

1. Although the covering letter referred to the Self-Pay “fixed price package for your surgery”, it also stated that the offer was subject to the Terms (outlined further below). 
2. The quotation included a list of items included and excluded from “your package”. The consultants’ operating fees were included in the package, whereas the consultant’s fee for the initial outpatient consultation was excluded. 
3. Term 18 confirmed that “All consultants are self-employed and provide their services direct to the patient.” Term 19 confirmed that “Your quote will state whether the consultant’s fees for the procedure…are included in the quoted price. If the fees are included, the hospital will usually collect the consultant’s fees as agent but occasionally, you will receive a separate invoice from the consultant for his portion of the procedure cost. If this occurs, the package price will be automatically reduced by the amount of the consultant’s fees.”

Outcome 

The parties agreed that the issue Malcolm Sheehan KC, sitting as a Deputy High Court Judge, was being asked to determine was the intention of the parties by reference to what a reasonable person, having all the background knowledge which would have been available to the parties, would have understood the language used in the Contract to mean. The key points of his Judgment were as follows: 

• On its own, the offer of a fixed price package “for your surgery” as referred to in the covering letter would indicate the surgery itself was the subject matter of and included within the services comprised within the Contract. However, it was clearly just one of the contractual documents and was expressly stated to be subject to the Terms. 
• From reading the quotation (which expressly included a list of items both included and excluded from the package), a reasonable person with the background knowledge available to the parties would understand that the scope of the contract did not include everything that related to the hip resurfacing procedure. 
• Clause 18 importantly states that the Consultants “provide their services direct to the patient”. Applying the natural and ordinary meaning of the word ‘direct’, clause 18 therefore stipulated, to a reasonable person, that the Consultants, rather than the Defendant, would provide their services to the Claimant. Therefore, when read in conjunction with “all consultants are self-employed”, this allowed the reader to understand that the Consultants: 1) did not work for the Defendant and, 2) provided their services independently and separately to the Defendant.
• The reference in Clause 19 to the “hospital will usually collect the consultant’s fees as agent” was also consistent with the notion that the contract did not include the provision of the Consultants’ services for the procedure – if it had been the intention to include those services, the Defendant would have been entitled to receive payment for those services in its own right. 

Overall, the Court dismissed the Claimant’s claim for declaratory relief and found that a reasonable reader of the Contract would not consider the scope of the Defendant’s contractual obligations included the provisional of surgical services. Ultimately, the private healthcare provider was found not to be contractually liable for the acts and omissions of its self-employed Consultants.

However, the Court highlighted in its judgment that the Claimant was not left without any legal remedy for his profound injuries – the Court’s determination of a contractual relationship between the Claimant and the Consultants left the Claimant with recourse to pursue a claim in contract against them and he will, in any event, be able to pursue claims against them in negligence. 

Commentary 

This decision should bring a sigh of relief to private healthcare providers in England and Wales for now. The Court’s decision respected the well-established concept relating to contractual liabilities in the context of private medicine that a private healthcare provider’s contractual liabilities will typically be limited only to the services that are being provided in ‘association’ with such procedures, and not the services relating to the procedure itself. In this instance, the Court determined that the consultants themselves had entered a direct contractual arrangement with the Claimant for the provision of such services, and the contractual arrangement between the Defendant and the Claimant did not extend to include those services. 

Nonetheless, the decision also emphasises the importance of carefully assessing and considering the contractual evidence of each individual case when considering whether a private hospital has contracted with a patient for surgical services. Each case will be considered on a case-by-case basis, and it will be important for the private hospitals to show that its contractual documentation is sufficiently clear as to which services are and are not included – it is unlikely that the very fact that a procedure was carried out by a self-employed consultant or independent contactor will carry much weight in this exercise.