Your Liability for the Actions of Staff - "Vicarious Liability"

As an employer, you are liable for the actions of others assisting you in the delivery of your professional services. "Others" is not always limited to employees but can in some circumstances extend to other parties you introduce, to assist you in the delivery of medical services.

The following are examples of circumstances in which you could be considered responsible for the wrongful actions of others:

• a third party suffers loss or damage;
• an omission results in injury to another person;
• a third party is sexually harassed;
• another person suffers direct or indirect discrimination; and
• an employee acts in breach of an employer's legislated obligations

Your liability arises due to an obligation at law to create a safe environment and not breach the duty of care owed to patients in providing services. Your duty may extend to the actions of others. Liability for the actions of others is known as "Vicarious Liability."

This article only considers the exposure you assume from employees, not other parties, and only in the limited environment as an employer and in respect to the delivery of medical services to patients. Industrial issues such as sexual harassment or discrimination to or by an employee go beyond the scope of this article.

This article assumes that the person is employed by you or your practice company, for the purpose of assisting you to deliver professional medical services.

The employee/employer relationship extends to such errors as:

• incorrect filing of a report or test;
• failure to follow up a patient who failed to present;
• organisation of incorrect treatments and ancillary services;
• inappropriate questioning of patients; and
• performance of procedures outside your medical indemnity policy coverage or staff competencies.

An employer is vicariously liable for the negligence or wrongful act of an employee provided that the employee is acting in the course of their employment. The employer can be vicariously liable for the negligence of the employee, even if the employer has no separate fault. However an employer can take steps to minimise the risk of an employee being negligent.

The following are examples of steps that may be taken to reduce the risk of employee error and so the risk of being held vicariously liable:

• formal policies for procedural issues;
• clear employment contracts with defined roles, responsibilities and authorities;
• clear and concise statements that behaviours or actions considered unacceptable in the workplace will not be tolerated;
• regular training sessions and assessments of competency;
• adequate supervision of employees, especially inexperienced staff; and
• clearly stated consequences of a policy breach, including the possibility of disciplinary action or termination of employment.

A good practice manual demonstrates that employees have a clear and well documented process to follow. It is not enough just to have such a process, it must be effectively communicated to staff and compliance monitored. In this respect, an employer should be able to demonstrate that employees are aware of policies and procedures and that they have been properly instructed in their application. The policies should also be reviewed and updated on a regular basis.

This can be achieved through a program of staff orientation, regular updates and ongoing training and revision. Invivo is happy to assist its insured doctors in the review of and, where appropriate, development of a practice manual.

As an employer you also need to understand the limitations of a medical indemnity insurance policy's coverage for your liability for employee actions.

Typically a medical indemnity policy will cover you for claims against you for your own alleged negligence and claims against you for your liability for the actions of trainees or other staff (such as nurses providing clinical support) but only where they are working under your supervision. Sometimes the policy requires direct supervision. In these cases, cover may not be provided in circumstances where staff work completely unsupervised.

It is also common for medical indemnity polices to exclude employees who are qualified medical practitioners, where their employment is as a medical practitioner. These employees need to obtain their own medical indemnity insurance.

It is important that every employer reads their policy carefully and ensures that they understand the cover provided. If additional cover is needed, they should discuss this with their insurer.

Grahame Willis
Chief Underwriter - Invivo