Understanding NCI Claims and Third-Party Notices

Doctors working in Malaysia’s private hospitals may be familiar with contractual indemnity clauses that seek to allocate liability between hospitals and practitioners. Naturally, this can raise concerns about what may happen if a patient brings a negligence claim and a hospital later seeks to hold an individual doctor responsible for some or all of any damages awarded. Understanding how Notices of Contribution and Indemnity (NCI) and third-party proceedings operate can help doctors better understand their potential exposure and the support available to them. For Medical Protection members, assistance can be requested in relation to these matters, subject to the scope of membership.

Third-party proceedings: how do they arise?

Doctors can become involved in legal proceedings even if they were not named in the patient's original claim.

Consider these fictionalised examples:

Example 1: Hospital brings clinician into the claim

A patient brings a clinical negligence claim against a private hospital following complications after treatment. The claim initially names only the hospital as a defendant. During its review of the case, the hospital alleges that aspects of the patient's care were the responsibility of the anaesthesiologist, Dr A, and issues third-party proceedings which bring Dr A into the litigation so they can seek contribution towards any damages that may ultimately be awarded.

Example 2: Clinician brings another clinician into the claim

Similarly, a patient may sue the surgeon Dr B. During the course of the proceedings, Dr B may seek to join Dr A, who was involved in the patient's care, on the basis that Dr A also played a role in the events giving rise to the claim.

The key point in both these fictionalised scenarios is that Dr A was not part of the original claim, but is later brought into the proceedings because another party alleges they should share responsibility.

Understanding the indemnity implications

The financial consequences of an NCI or third-party claim will depend on the facts of the case and the outcome of the proceedings. If the court finds in favour of the patient and decides that you are responsible for part of the damages awarded, you may be required to contribute towards those damages and the associated legal costs.

That is why it is important to understand what protection your indemnifier or insurer provides. Doctors should take time to check whether their policy or membership includes support for NCI claims and third-party proceedings, and to what extent.

For Medical Protection members, assistance is available if they are named as a defendant in a medical negligence claim via an NCI or third-party proceedings. This can include help in investigating the issues raised, responding to the claim and meeting any damages and legal costs for which the doctor is responsible.

It is also worth remembering that receiving an NCI or third-party notice does not mean you have been found liable. It is simply a way for one party to argue that another party should share responsibility for a claim. Whether that argument succeeds will depend on the facts of the case and the court's decision.

A note on contractual indemnities

Doctors should seek independent legal advice on contractual terms which may have an implication for indemnity. While these terms may be relevant, liability in a negligence claim will ultimately depend on the facts of the case and the legal issues involved.

Where hospitals seek to recover damages through an NCI or third-party action, the central question is whether the doctor bears legal responsibility for any part of the patient's claim. Doctors should be cautious about assumptions that they must automatically indemnify a hospital for losses arising from the hospital's own acts or omissions, those of its employees, or liabilities that arise solely because of the hospital's legal responsibilities.

Key takeaway

Receiving an NCI or third-party notice can be unsettling, especially if you were not named in the original claim. However, it does not mean you have been found liable, nor does it automatically mean you will be responsible for another party's losses.

If you become involved in an NCI or third-party claim, seek advice as early as possible.