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Being an employer – it's a risky business

You can’t be held responsible for someone else’s mistake. Or can you? Dr Graham Howarth and Dr Mamsallah Faal take a look at the concept of vicarious liability

As GPs, we often think of our risk in medical practice in terms of our own personal practice; what we do ourselves. We are rarely aware of how our employees can affect our risk.

But vicarious liability concerns just that – instances where we may be liable for the actions of our employees. This article considers how vicarious liability relates to our risk as general practitioners, the circumstances in which it may arise, and what we can do to reduce the risks.

What is vicarious liability?

If an employee commits a negligent act or omission while acting in the course of their employment, the employer may be held to be vicariously liable for a resulting claim. This scenario is not just limited to healthcare provision, but to all instances where the employer is ultimately deemed responsible for the services provided by an employee on the employer’s behalf.

It is in members’ interests to ensure that any employee, locum, or independent contractor working for them with a high level of clinical autonomy subscribes to an indemnity or insurance scheme in their own right, as it is unlikely that MPS will extend the benefits of membership to assist with claims resulting from vicarious liability for such staff.

Partners are jointly and severally liable in legal actions brought against the partnership, and it is essential that each partner and every assistant is a member of a recognised protection or defence organisation, and/or appropriately indemnified/insured.

If an employee commits a negligent act or omission while acting in the course of their employment, the employer may be held to be vicariously liable for a resulting claim

Who can be considered an employee where vicarious liability is concerned?

Where does the responsibility of the employer end with respect to acts of negligence and omission on the part of the employee? As with all things related to risk, there are no absolutes. Most of the work that has been done on this considers the role of control as the defining factor for deciding liability. In a typical employer-employee relationship, the locus of control lies with the employer and the employee acts within the parameters that have been set by the employer.

In the healthcare setting, typical employee examples would include in-house practice staff such as non-clinical administrative staff, dispensers, practice nurses and phlebotomists. It is assumed that as they have been recruited, trained and retained by the employer, the employer may be deemed liable should there be a claim against them.

For example, there have been documented cases where claims have arisen because of a failure by non-clinical staff to communicate patient complaints to their employer, communicate patient update information from hospital personnel to their employer, and because of the loss and/or misfiling of patient documents. In these cases, the employer has been found to be liable.

Liability for locums

However, the situation is less clear cut when we look at relationships where the locus of control lies outside the employer and this would typically occur with employment of a locum. Locums are generally considered to operate independently and whose service provision is solely to provide cover for a limited period of time. The quality of service a locum provides is not determined by the employer; they exercise their own professional judgment in treating patients and as such are not subject to the same routine management as other employees.

The quality of service a locum provides is not determined by the employer; they exercise their own professional judgment in treating patients

In this scenario, it could therefore be assumed that should there be a claim the employer is not liable, because they do not define the method and manner by which the locum works. On the contrary, the reverse is true insofar as the employer could be deemed liable in the first instance, until the independent contractor status of the locum is clarified.

In the process of clarification, legal practitioners may seek to confirm or discount the independent contractor status and could explore the terms of contract between employer and locum, the hours worked, whether the locum works for the one or one of many facilities and so on. Furthermore, questions could be raised as to how the role of the locum is understood within the practice by patients, who could well argue that they thought the locum was an employee of the practice.

Undoubtedly, this can be an onerous and tiresome process for both the employer and the locum and the aim is to avoid reaching that stage.

So how can we reduce our risk of vicarious liability?

Firstly, it is important to recognise that regardless of the status of the contract that exists between the employer and the ‘employee’, attention should be paid to addressing this risk. This can be done by instituting policies which define how employees should function in providing care to patients, be they independent contractors or not.

Secondly, it is equally important to ensure that the practice has comprehensive professional liability coverage for both clinical and non-clinical regular employed staff. It is also important to ensure that employees are adequately supervised and keep their skills up-to-date.

When delegating work, reflect on whether this is appropriate and if the recipient is able to perform the task

When delegating work, reflect on whether this is appropriate and if the recipient is able to perform the task. Finally, when it comes to employing locums, having a clear policy that defines the working relationship and is specific about the service that will be provided is essential.

In particular, make certain that the independent contractor status of the locum and the requirement that they have their own indemnity arrangements is emphasised and that there is documentary evidence of their professional indemnity arrangements. Furthermore, patients need to be made aware of the presence of the locum in the practice – this is best done by the reception staff.

The locum should also make sure that the patient is aware of his/her role within the practice and that this is clearly documented in the medical records.

Things to consider other than your own personal MPS cover

  • Vicarious liability and professional employee cover
  • Ensure that partners are covered, ie, joint and several liability
  • Public liability cover.

Public liability insurance

In addition to professional indemnity, it is important to remember that you will also require public liability insurance for your clinic, to protect you against claims for injury other than a result of clinical negligence sustained on your premises – for example, if a patient or visitor slips on a wet floor. This can be arranged through any commercial insurer.

Summary

In summary, these simple but effective measures will not only mean that your practice is operating at a high standard, but can be your defence in the event of a claim of vicarious liability. Remember, professional staff working autonomously need to have their own insurance or indemnity.

Further reading

Dr Graham Howarth is MPS Head of Medical Services (Africa). Dr Mamsallah Faal is currently studying for a Masters in Global Health Policy. Previously, she worked as a clinical lecturer in Family Medicine at University of the Witwatersrand Medical School, Johannesburg
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