Vicarious Liability!

Vicarious Liability

Q1: What is Vicarious Liability?

It is when a supervisory party is held liable for the negligent acts of a third party for whom they are responsible.

Q2: What is meant by ‘supervisory’ party?

The question is more of responsibility than direct supervision. Who is responsible for the act of the third party? Therefore, it is more about the relationship than whether or not there is any real supervisory component to it. Although you may not be supervising the day to day conduct of your employee or contractor it may not mean that you are free of any Vicarious Liability.

Q3: Is Vicarious Liability a common occurrence?

Although not that common, it is now a topic that we need to understand and beware of and take some precautions around. Because the recent supreme court ruling of the Ryan vs HDC case may have implications going forward for not only medical doctors but also dentists and practice owners.

Q4: What was the Ryan vs HDC case all about?

MPS (Medical Protection Society) took the Ryan vs HDC case (Health and Disabiilty Commissioner) to the Supreme Court.

Situation: Two doctors were operating separate individual practices from shared premises with separately defined patients. They shared overheads, practice manager, receptionist, nurses and some equipment. They owned the premises through a separate company. They filed their own tax returns through different accountants. There was no formal relationship at all in terms of any partnership relationship.

Act of Wrong-Doing:

  • While Doctor 1 was away on holiday
  • Patient of Doctor 1 turned up to the practice with a Urinary Tract infection
  • Doctor 2 saw this patient in the practice
  • Doctor 2 prescribed an antibiotic which was from a class of antibiotics that the patient had a documented allergy to.
  • Doctor 2 missed this allergy on the patient notes.
  • The pharmacist called the practice to query that the patient is allergic to the prescribed antibiotic- Doctor 2 was busy at the time. But the receptionist relayed this to Doctor 2 verbally. Doctor 2 said it was a different class of antibiotic so should be fine. Prescription went ahead and was given to the patient.
  • Patient had an allergic reaction and was admitted to hospital overnight but was otherwise fine.
  • Patient complained about Doctor 2. About the conduct of Doctor 2 alone.
  • The HDC found Doctor 2 in breach.
  • The HDC found that Doctor 2 was an agent of Doctor 1 and so Doctor 1 was also breached.

Q5: When does Vicarious Liability come into play?

For Vicarious Liability to come into play, there must be a relationship between the parties, an act of wrong-doing and the wrong-doing must have some connection to that relationship.

Q6: How does the court make the decision of who is liable?

Because the ruling is ultimately based on what is ‘just and equitable’, each case is unique and dependent on what is deemed as ‘just and equitable’ by the court.

Q7: Is there monies to be paid as a fine for a breach ruling?

When we deal with the Health and Disciplinary Act there is no damages issued here. So we are not talking about remedy and damages. There is only ever a breach.

Q8: How can Vicarious Liability affect dentists?

Section 72 of the Health and Disability Commissioner Act 1994 implies that it is the employer that is liable for the ‘acts and omissions’ of its employees.

It holds the employer responsible/liable for ALL acts and omissions of an employee “whether or not it was done with the Employer’s knowledge or approval”. But NOT if the employer had taken “such steps as were reasonably practicable”.

But in the situation of an agent/contractor the principal is held:
Liable of all acts and omissions done as an agent/contractor
But…..No BUTs, just plain and simple LIABLE.

Q9: What precautions can I take to protect myself as a practice owner?

Even if you are a clinician sharing premises or overheads with an informal arrangement you run the risk of being agents of each other under Section 72 of the HDC act.

Practice owners that hire dentists as contractors will be held vicariously liable for their “acts or omissions”.

Make sure your Practice Procedures and Protocols are current and accessible.

Have regular training sessions and systems in place that are simple to follow.

Q10: Does Vicarious Liabillity affect me if I am a contractor?

Currently, it appears that because a contractor does not technically have a ‘relationship’ with another contractor within the same practice, the Ryan vs HDC case scenario of the two doctors and the wrong-doing affecting both doctors, may not apply.

The principal owner of the practice however does have a relationship with the contractor so the owner could be held vicariously liable for the “act or omissions” of the contractor involved in the wrong-doing.

More clarification is needed on this scenario.

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*Above brief information is based on Dental Blueprints understanding of ‘Vicarious Liability’ through information from MPS and DPS. Please seek further clarification and proper legal advice as needed by joining DPS.