Hi there, I append the Price Waterhouse Coopers report of 2008 (this is the executive summary only). This was a scheme review carried out on request of the ACC in 2007/2008 and includes an evaluation of the scheme in context with other no-fault and tort based schemes, leaving ACC looking in a pretty positive light. There are some substantive changes in process for the scheme under the current National government, and the odd recession or two to take account of in the past three years…but still…!

 

Cheers

 

Māmari Stephens

 

Māmari Stephens | Lecturer and Project Co-Leader: the Legal Māori Project|      Te Kura Tātai Ture - Faculty of Law| Victoria University of Wellington -    Te Whare Wānanga o te Ūpoko o te Ika a Maui
Ph: 64 4 463 6319

Fax: 64 4 463 6365

Email: mamari.stephens@vuw.ac.nz 

 

 

 

 

Thank you for that Jeffrey. The report you cite is from 1996 I believe. There has been a great deal of experience with no fault systems since then.  Therefore, I would be surprised if it included an analysis of the Ontario or other North American systems. I am not sure which NZ Commission report you are referencing, but it has to be agreed that support for it has not been universal, and complaints have been made by various groups that accident rates increase in a no-fault system.

Early adopters are leaving no fault. Ontario’s is being eviscerated. If one can believe insurers, the costs of administration are in fact rising, in the AB system. A recent review of the Ontario system by the Financial Services Commission cites several reasons, but fraud in the system is high on the list. There is a huge mechanism that is put into place to deter and catch fraudsters. The cost is not just with the insurer, but with the public, rehabilitation providers and the medical community, who must attempt to cope with the avalanche of paper. Prior to recent amendments to the scheme, there were no fewer than 21 forms required to process an ordinary claim. The most extensive program of no fault, Bill 164, was a worker’s compensation-like scheme which insurers did not like, at all, due to its costs. The report you cite could not have included this program because it had just been implemented in 1994 and lasted just a couple of years.

There are other costs to no-fault schemes to be considered. See No-Fault Compensation Systems, R. Ian McEwin (written in 1999, so again, over a decade out of date)

 

Threshold states have had mixed experience in limiting tort actions. Caldwell (1977) found that the strict verbal threshold in Michigan reduced claims by 87 percent between 1973-75. Low pecuniary thresholds reduce claims much less. But, as Dewees, Duff and Trebilcock (1996), p. 57) point out:

since their introduction in the 1970s both monetary and verbal thresholds have been greatly eroded by claims ‘padding’ to surmount thresholds, by expansive judicial interpretations of verbal thresholds, and by the impact of inflation on monetary thresholds - most of which are not indexed to increases in the nominal costs of injury compensation.

Evidence on premium costs is mixed. Premiums increase in add-on systems. Caldwell (1977, p. 965) found that premium increases between 1971 and 1977 in add-on states were twice that of states abolishing tort altogether. Premium increases in states with tort thresholds depend on the size of benefits (including the size of deductibles and the extent to which collateral benefits are offset) and the tort threshold. But even if no-fault or first-party schemes can provide victim insurance more effectively, do they lead to more accidents because would-be negligent drivers are no longer responsible for the harm they cause? A number of empirical studies have attempted to assess whether reducing driver liability affects accident rates. In the United States Medoff and Magaddino (1982) found no-fault increased liability loss rates (claims weighted by average claim cost per premium dollar). Landes (1982a) found that states in the United States that imposed minor restrictions on tort claims experienced increases of 2-5 percent in fatal accidents while those imposing greater restrictions suffered 10-15 percent more. On the other hand, Kochanowski and Young (1985) and Zador and Lund (1986) found no relationship between no-fault and fatalities. In a study of New Zealand and Australia, McEwin (1989) found that add-on no-fault schemes did not increase automobile fatalities but in schemes where tort liability was abolished altogether fatalities increased by 16 percent. McEwin admitted that the size of the impact is questionable given the problems involved in isolating the various determinants of road fatalities. Both Gaudry (1988) and Devlin (1988) found increased accidents as a result of the introduction of a no-fault scheme in 1978. Gaudry attributed the increase not to the change in liability but rather to the fact that previously uninsured drivers now drove less carefully and a flat-rate premium that reduced the cost of insurance to high-risk drivers. Devlin, on the other hand, attributed the increase to the abolition of tort claims.

 

The conclusion:

 

One thing seems clear. If we are concerned solely with accident compensation, the tort system is unsatisfactory. However, the tort system seems to provide important safety incentives, although how important is difficult to determine empirically. Experience with no-fault schemes suggests that proponents were so concerned to fight battles to abolish tort that little time was given to designing efficient no-fault systems that took into account elementary insurance principles such as merit rating and incomplete insurance to overcome adverse selection and moral hazard problems. However, those administering no-fault schemes have learnt from experience and have made some adjustments. The law and economics literature, concerned primarily with the adequacy of the tort system and deterrence, has not concerned itself much with no-fault design. At the end of the day public policy towards accidents should be concerned with empirical evidence about the efficacy of alternate compensation systems incorporating elements of tort, disability insurance and social security. To date this has not been accomplished.

 

 

I would not like to leave Barbara's judgment of damage assessment under no-fault systems that: "The experience across the world with no fault auto systems is to overwhelm the payment scheme with the cost of the administrative scheme, resulting in erosion of benefits." unchallenged.  The simple truth is quite the opposite.  You only need to read the last New Zealand Law Commission report into New Zealand's comprehensive no-fault scheme and the numerous chapters in Dewees, Duff and Trebilcock etc " Exploring the Domain of Accident Law" to see that the administrative cost benefits of no-fault schemes far outweigh any scheme that relies upon court adjudication to determine fault and compensate in damages.  



Professor Jeff Berryman
Faculty of Law
University of Windsor
Windsor, Ontario
Canada N9B 3P4
519-253-3000 ext. 2965
e-mail jberrym@uwindsor.ca

You can access my research on the Social Science Research Network (SSRN) at:  
http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=364809



From:        Barbara Legate <blegate@legate.ca>
To:        "'David Wingfield'" <WINGFIELD@weirfoulds.com>, John Blackie <john.blackie@strath.ac.uk>, Martin Hogg <mhogg@staffmail.ed.ac.uk>, "obligations@uwo.ca" <obligations@uwo.ca>
Date:        12/04/2011 01:04 PM
Subject:        RE: New medical negligence, causation/burden of proof decision: McGlone v Greater Glasgow Health Board

There are many issues with this sort of system; enough to make one's head spin.
1. Fault. Unlike a car crash which has an identifiable and usually uncontroversial event to signal entitlement to a no-fault benefit, no such event exists with medical care. The identification of an act which gives rise to entitlement will be as  difficult under a no fault system as in a fault based system. The fact of a bad outcome does not mean entitlement. If it did then we would be effectively moving to a universal care system for all needed care should one intersect with the medical profession.
2. Causation. Along the same theme, how do you avoid a causation analysis? Assume we get past defining the event giving rise to entitlement, what do we do with causation? Where is the line drawn? If a line is drawn, it seems that it would require litigation in some forum or another.
3. Damages. David is quite right. The experience across the world with no fault auto systems is to overwhelm the payment scheme with the cost of the administrative scheme, resulting in erosion of benefits. In Ontario, we have experienced this over and over again. The money in the system attracts frauds who are not easily caught, so barriers to recovery are placed which are expensive to administer, and result in benefit reduction. Cross examination and the adversarial system do a much better job.
There are many more creative ways to deal with the delay, if there was a will to restrict non-productive motions. It seems to me that contingency fees are a good place to start. As plaintiff's counsel, I am motivated to settle cases early and well without a lot of procedural wrangling due to my contingency fee. Not so my colleagues, who bill by the
hour.
Self regulated professional insurers have motivations other than resolution of the case on a fair and pragmatic or economic basis. They could be banned.
Like democracy, the adversarial system  is the worst system for resolution of disputes with the exception of all others.  

ogg; obligations@uwo.ca
Subject: RE: New medical negligence, causation/burden of proof decision:
McGlone v Greater Glasgow Health Board

Colleagues may be interested also to know that there is now a signifcant
possibility that the Scottish Government will set up a no fault
compensation scheme for medical accidents similar to that operating in
Sweden.  This has been recommended by the McLean Committee, which
reported this year.  That will if it happens almost entirely remove
medical cases from the civil courts. The report and associated material
can be accessed at
http://www.scotland.gov.uk/Topics/Health/NHS-Scotland/No-faultCompensati
on/NFCSGResponse

The reaction of the Scottish Government is stated as:

"The vast majority of the care delivered in our NHS is of the highest
quality, but it is important that people who have suffered as a result
of clinical mistakes should have some form of redress.

We are of the view that appropriate redress should not be delayed
because a compensation claim can take years to go through the courts nor
should precious NHS resources be spent on expensive legal fees.

The group has suggested that more patients could have claims resolved
under such a system than achieve resolution through the courts at the
moment - and preliminary analysis suggests that it is possible it could
be achieved for around the same costs as the NHS currently pays in
compensation and legal fees.

We now propose to investigate thoroughly how such a scheme would work in
practice, both for the benefit of individual patients and the good of
the health service as a whole.  Further analysis of the cost
implications will also be undertaken."

Causation questions will naturally arise under any such scheme, but are
unlikely to get much publicity.  The report does not say much about
causation, but is proposing full compensation, rather than a tarrif
system. Legislation setting it uthe scheme p might well sensibly include
some specific provisions on causation.

John Blackie


Professor John  W G Blackie
Emeritus Professor of Law
University of Strathclyde
email: john.blackie@strath.ac.uk<mailto:john.blackie@strath.ac.uk>
Mobile: 07917728908
Home Office phone: +44 (0)131 202 6481
Home Office Address:
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phone: +44 (0)131 202 6481

fax: +44 (0)141 548 3639



________________________________
From: Martin Hogg [mhogg@staffmail.ed.ac.uk]
Sent: 07 April 2011 15:09
To: obligations@uwo.ca
Subject: New medical negligence, causation/burden of proof decision:
McGlone v Greater Glasgow Health Board

Colleagues may be interested in a decision handed down yesterday in the
Court of Session, McGlone v Greater Glasgow Health Board, reported here:

http://www.scotcourts.gov.uk/opinions/2011CSOH63.html

and which was reported on the BBC website yesterday:

http://www.bbc.co.uk/news/uk-scotland-glasgow-west-12985344

The pursuer, who had had to undergo a radical hysterectomy,  argued that
the defenders had been negligent in failing to diagnose and report the
presence of a cancerous or pre-cancerous lesion at a time when
conservative treatment would have been appropriate and which, had it
been undertaken, would have preserved her fertility. The defenders
argued that, even had they not been negligent, the materially same
course of treatment as was in fact carried out would have been carried
out, to the same result.

The facts might have given rise to the potential for a Chester v Afshar
type approach by the court. In the event, however, the judge (Lord Tyre)
considered that it was for the pursuer to discharge the ordinary burden
of proof as to what would have happened had there been no misdiagnosis
and failure to refer for treatment. He distinguished Fairchild, McGhee,
Hotson, and Chester: this was a case more like Wilsher, in his view,
i.e. one in which the traditional approach to causation could produce a
determination of what would have happened. He concluded:

"it is not my task in the present case to decide whether I am satisfied,
to the standard which a scientist would apply in assessing whether
something has been proved, the location, nature or size of whatever
lesion or tumour was present in the pursuer's cervix in December 2005
and March 2006. My task is, rather, to determine, on balance of
probabilities, after review of the whole of the evidence, whether the
lesion or tumour present at that time was such that, had it been
correctly identified and reported, the pursuer would have undergone
appropriate treatment that was more conservative than the radical
hysterectomy which was found necessary in 2008. Clearly that is not a
straightforward issue, but discharge of the onus of proving it to the
civil standard seems to me to be the type of task commonly faced by
pursuers in medical negligence claims.

With this approach in mind, Lord Tyre holds, as a matter of fact, that
if there had been correct interpretation of test results at an earlier
stage in the proceedings, the pursuer would have been referred as a
matter of urgency for further investigation.

Examining he medical evidence, he concluded that it was extremely
unlikely that, at the point when misdiagnosis took place, there was
already a tumour which had become invasive and sufficiently large to be
symptomatic (para 55). He further concluded that, "if a correct report
of the pursuer's cervical smear had been given either in January 2006 or
in March 2006, the medical management which would have taken place would
have been treatment by LLETZ or cone biopsy" [i.e. not a hysterectomy]
(para 62). The case was put out for further procedure (i.e. for
determination of, inter alia, the amount of damages, I assume).

So, the decision appears to be a classic example of a case where a
Chester v Afshar approach is avoided by virtue of a judicial
determination that a different outcome to that which occurred would have
taken place had the patient been properly treated. At least, that is how
I read it after a cursory first reading.

Martin Hogg
Edinburgh Law School