Health, Insurance

NB doctors may seek new liability coverage after CMPA ruling

New Brunswick doctors may be looking for a new liability insurer after a judge ruled the Canadian Medical Protective Association (CMPA) is not an insurer under provincial legislation, says Fredericton litigator Matthew Pearn.

The ruling by Court of Queen's Bench Justice Tracey DeWare helped the CMPA fend off a claim by a woman who was sexually abused by her physician and wanted the CMPA to pay out on her abuser's behalf, according to a CBC report.

“Doctors are naturally going to be concerned because I think most will have assumed that the CMPA is, in fact, a malpractice insurer,” Pearn, an insurance lawyer with Foster & Company, tells wouldn't be surprised if physicians were making phone calls and inquiries about obtaining their own private liability insurance,” he said.

Pearn estimates more than 90 per cent of doctors in New Brunswick rely exclusively on their membership in the CMPA to satisfy provincial legislation that requires doctors to carry liability insurance. However, Pearn says that figure may change as a result of DeWare's January decision in Shannon v. CMPA.

This lengthy legal battle dates back to the mid-1990s, when Shirley Shannon was coerced into a sexual relationship with her psychiatrist, Dr. Kwabena Agyei Akuffo-Akoto. Shannon alleged that Akoto put her on excessive medications and threatened to have her sent to a mental institution if she told anyone what was going on.

Shannon eventually sued Akoto. In 2004, she obtained default judgment against Akoto with damages and legal costs totalling roughly $600,000. But by the time Shannon came to collect on the judgment, Akoto had fled the country, leaving no assets behind.

In 2005, Shannon filed another claim, this time against the CMPA. She argued the CMPA should pay the default judgment as the CMPA was Akoto's insurer during the time of the abuse. However, the CMPA claimed it was not a malpractice insurer and that it had no obligation to pay out a claim in instances of deliberate criminal acts such as sexual abuse. Further, the CMPA said it had discretion as to whether it would pay any claim.

In a decision earlier this month, DeWare sided with the CMPA, describing it as a “mutual defence association” — its main job is to defend doctors against medical malpractice claims. It was not, she found, an insurance company with the obligations that go along with being an insurer. That came as news to the New Brunswick Department of Health as well as the College of Physicians and Surgeons of New Brunswick. Both had viewed the CMPA as an insurer before DeWare's decision.

Pearn says since the New Brunswick government contributes to the cost of obtaining insurance for its doctors, payments by the province towards CMPA membership may come under further scrutiny. The CBC reports that a second lawsuit launched by Shannon, claiming that doctors who rely solely on CMPA coverage are operating illegally, is still active.

“It's going to concern some people to realize that public money is going towards CMPA membership instead of to a malpractice insurer,” Pearn says.

Despite the decision, and the discretionary nature of the CMPA's payouts, Pearn says most law-abiding doctors won't find themselves any more personally exposed as a result. Even if the CMPA had been declared an insurer under provincial legislation, the criminal nature of Akoto's actions would most likely fall outside the scope of any insurer's duty to indemnify, he explains. Also, the CMPA typically does pay the cost of judgments entered against doctors by patients for medical malpractice. In 2014, the CMPA reports that it paid out around $237 million to claimants across Canada.

“Although it acts with discretion, the CMPA still provides doctors with legal counsel to defend them in the event they are facing a civil claim and, in some cases, a criminal claim arising out of their practice,” Pearn says. “In many ways the CMPA do more than an insurance company would. They provide a very aggressive defence.”

For doctors worried that they may now be without protection from medical malpractice complaints, Pearn suggests they read the fine print.

“If you want a better understanding of what the CMPA does, look at your membership agreement, and then decide if the coverage is sufficient for you,” Pearn says.

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