Helping dental practice owners understand their liability in an increasingly litigious society
As a dental practice owner, you may be unaware of the legal risks to your business. In this increasingly litigious society, it’s important to understand what you are liable for, and how to mitigate the threats to your practice. MIAB’s Director, Tristan Lennox-Gentle, explains specific exposures, and the steps to ensure you’re effectively protected.
What is Vicarious Liability?
Vicarious Liability refers to a situation where someone is held responsible for the actions or omissions of another person. In regards to a dental practice workplace, an employer can be liable for the actions or omissions of its employees, including self-employed, clinical and non-clinical staff.
As a business owner, you may be unaware that you can be held liable for a range of actions committed by your employees whilst they are under your employment. This includes, but is not limited to, clinical negligence, bullying, harassment, violent or discriminatory acts, a breach of data regulations and even acts of libel.
Increased risk of litigation
With such a complex matter, it’s not uncommon for practices to become confused with where their responsibility starts and ends. As such, a default position is that employers are always liable in common law for the actions of their employees whilst at work, so in a civil case it is not uncommon for the employer to be named in litigation, as well as or instead of the employee.
Working in healthcare the risks of litigation is amplified due to the added clinical negligence exposure faced by the business and the complexity of multi-touch care. For example, a patient may require urgent treatment, which is picked up by the first available dentist. Their usual dentist will then follow-up, whilst a hygienist may schedule a maintenance plan. When scenarios such as this occur, it’s sometimes difficult for a claimant to attribute the responsibility of negligence to a single person, so it’s common for the claimant’s solicitor to go after the practice as a whole. In cases where individuals are looking for compensation, it’s also often perceived that the practice will have deeper pockets than a single individual, increasing the likelihood of the business being named even if the error can be clearly attributed to a single employee.
Associates who are drawn from abroad also carry a unique set of risks. They may have indemnity to cover their activities at the time, but often challenges arise after a clinician returns to their home country. For example, a dentist practises for three years, then a year after returning permanently to their home country, is named in litigation by a patient pursuing a negligence claim. What next for the practice?
To avoid liability, the dental practice will need to trace the former employee, but with the challenges of finding the individual, enforcing UK law internationally or hoping the clinician has maintained their indemnity, it’s highly likely the practice will be held accountable for the actions of the ex-employee instead.
Who should be covered?
When reviewing your current policy for adequacy you should consider your former employees. In the event of a claim against those no longer working in the business, deflecting the claim is only possible if the employee can be traced and had maintained their cover during the period they were working for you, which is often left to a matter of good faith.
You may think you’re not responsible for someone who is self-employed, however contracted individuals are considered employees in the eyes of the law subject to certain criteria. If you’re unsure, the three main things to consider are; the level of control you hold over the employee (e.g. if they wear the practice’s uniform and/or conform to set working hours), the extent to which the individual’s contribution is integral to the business, and economic factors such as mutuality of contract and worker’s rights.
Non-clinical staff should also be covered, as you can be found liable for actions or omissions outside of clinical negligence, as mentioned above.
Key Considerations
A principal’s indemnity is not always a cover-all for the business
Some practices assume that because a principal dentist is indemnified, that it automatically extends to the business name and the staff within. This is rarely true and requires a specific request of your indemnity provider to include these types of policy extensions.
Consider all staff in your policy
Another misconception is that not all staff need insurance. As previously mentioned, bullying, harassment and clerical errors causing patient detriment are all possible causes for litigation against a business, and can be caused by any member of staff. For example, if a dental nurse leaves for a career change and fails to maintain indemnity, if a claim is made against them, it will ultimately be the practice left to pick up the tab.
Don’t rely on commercial combined insurance
It is likely the practice’s commercial combined insurance will exclude clinical negligence. Even in the event of cover being provided, legal cover is regularly capped at £250,000 per claim, an inadequate limit of indemnity given the relative size of compensation awards in recent years.
Insure where economically viable to do so
Many scenarios for which employers are vicariously liable for the acts of employees will be covered by professional indemnity insurance, or to a lesser extent employer’s liability or public liability. Review your insurance to ensure your existing policy covers claims against the business as well as the clinician.
Train and educate
Take all reasonable steps to guard against the actions of ‘rogue’ employees. Start with a robust recruitment process. Make sure CVs are accurate and references are taken up. Once working, ensure they are fully trained and there is a clear audit trail to evidence this.
Don’t rush when choosing providers
Price and quality rarely amount to the same thing. Seek advice where appropriate to ensure your arrangement is as suitable as possible, including useful features like; run-off cover, GDC defence, PR and crisis mitigation.
Review your cover
A review of insurances may well prove worthwhile to ensure the policy covers claims against both the business and staff.
It is important to understand what type of policy you have as it determines what you should be looking out for. For example, a good claims-made policy will have at least three years’ run-off cover, meaning that under certain circumstances, claims can still attach to your policy for a minimum of three years’ after the policy expires. It should also be regulated and accompanied by a comprehensive policy wording outlining your cover. Read more about the types of cover here.
The policy should extend to note your business as an insured entity as well as the clinicians within it and consequently afford suitable protection against claims where your business name is joined in legal action.
Your excess should ideally be nil and the policy should offer unlimited access to a dento-legal helpline to enable you to access qualified advice should you need it.
For more information on the above, contact MIAB’s Specialist Insurance Adviser, Trudy Laing on 01438 730212, or email [email protected].
