A LOOK AT THE ROLE OF THE SOUTH AFRICAN
ASSOCIATION OF HOSPITAL AND INSTITUTIONAL PHARMACISTS IN THE HISTORY OF THE
PROFESSIONAL LIABILITY INSURANCE FOR HOSPITAL AND INSTITUTIONAL PHARMACISTS IN
SOUTH AFRICA
As early as 1973, when the association was
still named the South African Association of Institutional Pharmacists, the
matter of Professional Liability Insurance was first mooted. It was at the 17th
Annual General meeting held on 9th November 1973, after a proposal from a
member from the Cape Branch, that it was decided that the incoming committee
"investigate the position of pharmacists in the case of professional
errors or negligence".
During a meeting on 8th May 1974,
held in Durban between members of the Executive Committee, Branch Chairmen and
certain co-opted members, at Mr Dudley Goldberg's request, the matter of Public
Liability was raised and discussed and the executives' understanding of the
situation was explained and accepted. Mr Goldberg was the Cape Branch's
representative on EXCO.
Then, at the following AGM, held on 8th
November 1974 it was resolved that a letter be addressed to each Provincial Law
Advisor authority in order to establish what exact coverage in respect of
Professional Liability Insurance was available and this information be reported
back at the next meeting. This information to be obtained by local branches.
By 1976 the South African Association of
Hospital and Institutional Pharmacists had been established and below is a
record of events, as gleaned from FORUM, of how SAAHIP finally obtained
affordable public liability insurance for its members.
Below is the editor's comment in the first issue of FORUM, published in
1976:
PROFESSIONAL LIABILITY INSURANCE
For those of you in provincial employment, and under the impression that in the event of a misadventure such as a dispensing error, you would be protected by the administration, I regret to say that is by no means necessarily the case. Our Exco has been looking at this and is in the process of negotiating professional liability insurance for members at a favourable rate (tentatively R6.50 per R100 000). More about this later.
The editor commented in the second issue of FORUM published in 1976, as
follows:
PROFESSIONAL LIABILITY INSURANCE
On closer examination of the fine print, the Executive Committee found snags in the insurance offered, and other sources are now being investigated.
The following viewpoint penned by the same editor of FORUM was published in the April 1978 issue:
NATAL VIEWPOINT
PUBLIC LIABILITY AND THE HOSPITAL PHARMACIST
For some years now, we in Natal and I know the Cape, have been concerned about this question. Are you protected by the Master and Servants Act as many think? Or could you be sued and found personally liable for heavy damages? Would your State or Provincial employer protect you or not? If so, to what extent?
The following two documents give highly significant and explicit answers. The first is a circular sent to all Heads of Departments in one of the provinces in 1970 and appears below:-
"CLAIMS AND LITIGATION INVOLVING THE ADMINISTRATION OR ITS EMPLOYEES ACTING IN THE COURSE OF THEIR EMPLOYMENT"
l. The attention of Heads. of Departments/Divisions is drawn to the fact that where any wrongful act or omission – including any negligent act in a matter involving the question of professional skill - by an employee of the Administration, while acting within the scope of his employment, results in damages to another person, such employee exposes not only himself, but also the Administration to legal action for recovery of such damages.
2. Should the allegedly wrongful criminal act or omission prima facie constitute not only an actionable civil wrong but also a criminal offence, the result of the criminal trial and the manner in which the defence case is conducted could have an important bearing on any possible civil action.
3. It is essential therefore that whenever a wrongful act or omission is followed by a civil claim or criminal action or is likely to be followed by such action, the full facts of the events and the circumstance surrounding the occurrence as well as the statements by the officers concerned, all the relevant details, shall be reported to the Provincial Secretary without delay to enable the matter to be referred timeously by him to the Deputy State Attorney. The Attorney will decide whether he will act on behalf of the employee, who will be required to furnish an undertaking to pay the cost of his defence should he be called upon to do so.
4. The foregoing procedure applies to all cases except in respect of claims resulting from motor accidents involving Administration-owned vehicles. In these cases, the Chief Engineer, Roads Department is authorized under Executive Committee Resolution No. 1140 dated 14th April 1965, to approach the Deputy State Attorney direct in connection with the defence of such drivers by the State. The cost of defending the driver will be met by the Administration provided the driver was not under the influence of intoxicating liquor or drugs and did not make any admission of liability to the third parties concerned.
5. After a claim has been disposed of, the Deputy State Attorney will ·advise the Administration whether, in his opinion, the expenditure in connection with the claim and counsel's fee should be recovered from the officer. Should the Deputy State Attorney consider this to be not necessary and the Provincial Secretary concurs in this view, the expenditure involved may be charged to the Administration, provided that the officer concerned at the time of the act or omission which led to the claim
a. was acting bona fide in the performance of his official duties;
b. did not exceed his powers;
c. was not under the influence of intoxicating liquor or drug;
d. did not harm the Administration's case by an admission of guilt.
6. It may sometimes be difficult to determine whether the employee concerned was in fact acting within the scope of his employment. Rather than risk a mistaken determination in this regard, the prior advice of the Administration's Legal Advisors should be sought through the Provincial Secretary without delay, no matter how tenuous the connection between the duty and the allegedly wrongful act or omission may appear to be. In such instances the question on which an opinion is required should be clearly put and reference made to any statutory provisions or previous opinion known to have bearing on the case."
The second is the full text of the reply by the Director of Hospital Services of one province to a query from the local SAAHIP branch. The question was what the attitude of the Administration would be should a Pharmacist be called on to defend a lawsuit for negligence: -
"Dear Sir,
1. Thank you for your letter of 16th
April, 1975 enquiring into the professional liability cover of Pharmacists
employed by the Administration.
2. The Administration does not insure
against liability arising from any injury to a patient due to the action of any
employee in the Provincial Hospital’s Service.
3. The
Administration would, however, be prepared to consider requesting the Deputy
State Attorney to defend such an employee provided that he:
a) Furnishes an undertaking to pay the
cost of his defence should he be called upon to do so;
b) was acting bona fide in the
performance of his official duties;
c) did not exceed his powers;
d) was not under the influence of
intoxicating liquor or drugs;
e) did not commit an offence; and
f)
Did
not harm the Administration's case by an admission of guilt.
Yours faithfully,"
It is quite clear that the pharmacist is
completely on his own here.
Para 2
of the first letter is very relevant to everyday practice in many
hospitals, and an example is given below: -
For various reasons many hospital pharmacies,
as a matter of policy, omit patients' names from their medicines, using instead
the outpatient number only, as a means of identification. Probably the main
reason is that pressure of work does not leave time to write patients' names.
This, as those of you who read the article in a
previous "Forum" on forensic pharmacy may have noted, is clearly
illegal. The relevant legislation unambiguously and specifically mentions
hospitals as being obliged by law to label each container of medicine with,
amongst other details, the patient's name. Omission of this is a criminal
offence.
Consider now the case where a patient receives
the wrong medicine, and, with no name on the package to alert him to this fact,
takes the medicine and suffers permanent disability or even death. It doesn't
need too much imagination to think of possibilities – eg the hypoglycaemics,
the anti-hypertensives and so on.
Conviction for failing to affix the
name to the medicine, as this paragraph points out, could have an important
effect on the outcome of a subsequent civil case for damages.
Private legal advice obtained on the above is
that a pharmacist could very easily be sued in his personal capacity for
damages. In case of permanent disability or death these could be financially
crippling for the rest of the pharmacist's life.
Very important to note is that an instruction
from an employer or superior would not constitute a defence in the above case,
as no person may instruct another to perform an act or omission which is
illegal.
So, there you are. We don't have, and, it would
appear, cannot get, satisfactory insurance.
WHAT ARE WE GOING TO DO ABOUT IT?
Since writing the above, yet another circular
on this subject has appeared. It is reproduced below with deletion of
references to the province, as it is an
internal circular.
"OBJECT
1. To draw attention to the advisability of taking out insurance against the legal consequences of actions performed in the course of official duties.
BACKGROUND
2.1 Paragraph of the Provincial Hospitals Department Staff Code reads as follows:-
"Where any wrongful act or omission, including any negligent act in a matter involving the question of professional skill, by an employee of the Administration while acting within the scope of his employment exposes not only himself but also the Administration to legal action for recovery of damages and the procedures set out in paragraph 2A of the General Code must be applied"
2. 2 Paragraph 2A (8) of the General Code reads as follows::-
Whilst the Administration does not insure against liability arising from the actions of its staff and carries its own risks in this regard any member of the Hospital Services, professional staff in particular, is free to take out personal insurance for this purpose if he/she so desires. It may well be in the interests of staff to consider this course of action
2.3 The Administration's Legal Adviser recently commented as follows in this connection: -
"The question of the liability of a hospital management for the delicts of the persons in its employ has not yet been finalized in Natal and that may be regarded as at least one reason for taking out the insurance referred to above. The question was considered in the recent case of Hospital v Le Breton 1975 where the Court concluded that the hospital could not be held liable for the negligence of a nurse but that its liability was limited to the provision of properly trained staff. In other words, so one concludes, the nurse herself or in the case of a doctor, that doctor would have to be sued………. "
DISCUSSION
3. 1 The foregoing extracts all underline the importance for personnel in the Hospital Service to take out insurance against the legal consequences of actions performed in the course of official duties. This applies particularly to doctors and nursing personnel who are paid-up members of the South African Nursing Association and are automatically indemnified against claims/charges of this nature.
3. 2 In the case of Anaesthetists' Assistants it is possible that they will not be covered by the South African Nursing Association in their capacity as Anaesthetists' Assistants and they should therefore obtain clarification on this point and then decide what action to take.
PAYMENTS OF PREMIUMS
4. Whilst medical personnel are strongly advised to insure themselves against civil claims that may be made upon them or criminal charges that may be preferred against them on grounds of alleged unlawful conduct or negligence on their part in the performance of their official duties, the payment of such insurance premiums will be the responsibility of the officer/employee concerned and not the Administration.
Well, there you are. Spelt out without any room
for doubt.
Mike Timms
In the same issue of FORUM, the following item
by Colin Lowther was published:
STOP PRESS!
Since this "FORUM" was put together, we have information from our Cape Branch that they have negotiated an insurance policy with the General Accident Insurance Company. Under this policy Association members would be given cover of up to R1000 000 per person per annum for a premium with stamp duty amounting to R6-31. To give this cover at least 100 Association members must participate. Branches have been requested to find out how many members are interested, and this should be treated as a matter of urgency,
The minutes of the EXCO meeting that took place on 12th May, 1978, reflect a decision as follows:
7.0.0. Insurance
7.0.1. Mr. Goldberg will investigate with General Accident regarding the policy. He will also then draft a letter which is to be sent out to all members of S.A.A.H.I.P.
In the April 1980 issue of FORUM it was
announced that, at the request of members and of the Cape Branch of SAAHIP,
details of the group policy schedule were being published. Credit for having
arranged a suitable group policy for public liability insurance for SAAHIP
members went to the Cape Branch. Incorporated General Insurances Limited was
the company with whom the policy was negotiated.
Included in the announcement was the following:
If the Assured shall make any claim knowing the same to be false or fraudulent, as regards amount or otherwise, this insurance shall become void and all claims hereunder shall be forfeited.
Members who wish to insure themselves are required to pay an annual premium of R6,06, payable to:
National Secretary S.A.A.H.I.P.
31 Iris Road NORWOOD Johannesburg 2192
Your cheque will act as a receipt.
Then on November 21st 1981, at the combined Annual General and First Executive Committee Meetings held at the Airport Hotel, Kempton Park, the following was minuted as item 15:
15. INSURANCE:
15.1 Insurers propose increased premium from 1982 of R25.25 per member per annum and compulsory for all members. Exco rejected this.
15.2 next issue of forum to include a note about 15.1.
15.3 PSSA to be asked to try and arrange inexpensive Public Liability policy for voluntary membership.
15.4 Letter – Price Forbes expressing dissatisfaction at the handling of the Malpractice Liability Policy
The March 1982 Issue of FORUM contained
the following report
PUBLIC LIABILITY INSURANCE
As you all know, the Public Liability Insurance for SAAHIP members has been discontinued. For the information of members. Paragraph 6 of Treasury Instruction 3308 is reproduced hereunder. You are asked to read the paragraph, think about it and then pass comment as to whether it is still necessary to pursue the matter of Public Liability Insurance.
"(6) When the claim has been disposed of, consideration must be given to the question whether the amount paid to the claimant and/or the legal costs incurred or paid out, should be recovered from the officer/employee who was responsible for the damages or whose action gave rise to the claim. The State accepts liability for the payment of all claims instituted against its officers/employees as a result of an act or omission by officers/employees and will not recover the expenditure from the officer/employee concerned, unless the State Attorney, after consultations with the head of the department concerned, considers that the officer/employee concerned, in relation to and at the time of the act or omission: -
a) did not act in the execution of his official duties or did not bona fide believe that he so acted;
b) exercised his powers deliberately or in bad faith or exceeded such powers;
c) took liquor or drugs in sufficient quantities (of which there is adequate proof) which possibly created or contributed to liability;
d) without prior consultation with the State Attorney, made an admission of guilt which was detrimental to the State's case;
e) acted recklessly or willfully; or
f) acted in any other manner similar to that described above;
in which case the full amount which the State was compelled to disburse as well as the legal costs of the State Attorney, shall be repayable to the State by the officer/employee.
The minutes of the Natal Coastal branch's
committee meeting held on 1 February 1983, reflect the following:
At a subsequent meeting of the same committee held on 10th May 1983, it was recorded that application forms for Public Liability Insurance had been printed and would appear in FORUM. This duly occurred. The July 1983 issue of FORUM contained a full-page report providing details of the Public Liability Insurance. According to the opening paragraph Dispensing Liability Insurance had been made available to all SAAHIP members by Stewart Wrightson (Natal) (Pty) Ltd., an international firm of Insurance Brokers. The underwriters, the Commercial Union Assurance Company of South Africa Limited would issue a blanket policy covering all members of the Association in all the provinces of the Republic of South Africa. Those members wishing to obtain the cover were requested to complete the application form enclosed in the journal, and to return it with their remittance to Stewart Wrightson at the address shown on the application form. Further details including scope of cover were included and the limit of liability was R250 000 for any one accident in any one year. The period of insurance would run from 1st June 1983 to 1st June 1984, and the yearly premium was R25 plus 25c stamps plus R1 certificate fee. The total, R26,25 was to be paid yearly in advance and each member would receive a renewal notice from the brokers.4.3 Negotiations regarding the Public Liability insurance were being carried out in Durban now. Mrs Buekes reported that she would have a copy of the policy, and other details by 4th February, ready to present to the meeting.
The Natal Coastal Branch Chairman's Report dated February 1985 contained the following:-
"The malpractice insurance was again available, at a lower premium this year, and has proved very popular."
In the minutes of a committee meeting of the Natal Coastal Branch of SAAHIP held on 14th May 1985, the following is recorded under General:-
" 9.4 Insurance for the coming year is now due – to try and encourage people to join".
The July 1985 issue of FORUM contained the following reminder:-
REMINDER……………..REMINDER
SAAHIP members are reminded that the Dispensing Liability Insurance is still available at the ridiculously low premium of R20.20 per annum. Application forms are obtainable from Branch Secretaries, Bowring Barclays and Associates (Natal (Pty) Limited are the brokers, and the underwriters are the National Employers' General Insurance. Premiums were due from 1/6/1985.
Then, in his report on activities between
February 1987 and January 1988, the chairman of the Natal Inland Branch
mentioned the following:
From 1988 we jump to 1991.I would like to remind you of the availability of SAAHIP Dispensing Liability Insurance. This is to protect you against being sued if you put an incorrect label or dosage, method of storage or formula on a label in the process of dispensing a prescription. The premium is R20.20 per annum through SAAHIP and is really worth your consideration. Forms can be obtained from myself or Joy Talbot.
Thanks to information provided by David Sieff, of the Southern Gauteng Branch, it was in 1991 that Neville Lyne, who had been appointed as Head of Communications and Marketing at the PSSA national office, in conjunction with C Stanton, conceptualized and introduced "Insurance Advisor", the Professional Indemnity Insurance Plan (PIP) for PSSA members. The Southern Gauteng branch of the PSSA originally managed the Insurance, until it was taken over by the Professional Provident Society in partnership with the PSSA National Office.
In my personal collection of documentation pertaining to Professional Indemnity Insurance I have found a “Certificate of Insurance”, issued by Pharmacy Mutual Insurance Services Reg no: 1999/027049/07
For my next locum I was issued a Certificate of Inssurance, also as part of the Professional Indemnity Plan on behalf of the PSSA for the period 1 July 2004 to 30 June 2005, the insurer was SANTAM Ltd with the Underwriting Managers & Administrators being PI Acceptances (Pty) Ltd, with a postbox in Braamfontein, 2017.
In 2007 and 2008 my Professional Indemnity Insurance was once again arranged by PSSA, but the insurer was GPLA, General and Professional Liability Acceptances.
Thereafter the Professional Indemnity Insurance was provided by the Professional Provident Society (PPS) via PSSA, with the insurer being ETANA Insurance, until 2012, when I no longer needed it..
The next mention of this insurance that I could trace in my documentation appears in the PSSA Annual Report for 2015/2016, as published in the SAPJ 2016 Vol83 No 6. Item 1 under General, and headed "Changes in PPS contact details" and reads::
For some years now, the PSSA Professional Indemnity Product has been offered in partnership with PPS. The primary contact person has been Charles Skinner, and many PSSA members have been assisted by him when they have been faced with a potentially devastating insurance claim.
Charles retired on 30 April 2016. The PSSA joined with PPS in thanking Charles for his valued service and input on the PSSA Professional Indemnity Scheme. He has always gone out of his way to support members who found themselves in the unfortunate situation where a negligence claim was filed against them. The PSSA wishes him a fruitful and satisfying retirement.
To ensure that the excellent service that Charles has provide continues following his retirement, PPS has taken steps to ensure that members will be given appropriate support. This will be achieved by allocation of various queries to appropriate entities, Members may contact the PSSA office for contact details.
Item 2 is headed "Expanded services from PPS" and reads:
PPS has announced further "free extensions" that will be added to the Professional Indemnity Product. The PSSA, in partnership with PPS, has arranged that certain extensions for the PSSA Professional Indemnity Product will be offered free of charge to PSSA members and will become effective at renewal of the policy. The free extensions included from renewal are:
Free legal Assist Line
Health and Safety Hotline
Business Identity Theft Cover
Then, five years later, another change in the
insurance is announced in the SAPJ, Vol 88 No 5, of 2021, in the PSSA
Perspectives section:
Changes to professional indemnity insurance
Recently the PSSA announced a change to the preferred provider of professional indemnity coverage to PSSA members. PPS has been involved for many years and the introduction of PPS Health Professions Indemnity provided an opportunity to rethink how indemnity protection is delivered to our members. The strategic objective of the PPS business is to provide health professionals with quality comprehensive cover delivered through service excellence in a sustainable manner. The PSSA and the PPS Group have significant overlap in membership and we are excited to bring you the enhanced product offering.
With effect from 1 July 2021, all professional indemnity insurance renewals and new business applications for pharmacists and BPharm students are processed on the new product, which is underwritten and administered by PPS Health Professions Indemnity. This has allowed us to improve the insurance cover provided by the product with minimal impact on the cost of insurance. The PSSA continues to play an important role in the delivery of the product and works hand-in-hand with the PPS Health Professions Indemnity team. To date, we have received positive feedback from those members who have gone through the revised processes with annual inception dates in July and August.
Insurance cover is now provided on an independent basis, meaning that each member has the contracted cover limits available to them irrespective of the performance of the PSSA portfolio as a whole. At the same time, the cover limits have been increased to consistent levels designated for the various risk categories. It is the responsibility of PPS Health Professions Indemnity in consultation with PSSA management to constantly review the limits to ensure our members are removed as far as possible from the liability risk. Best of all, the product qualifies for allocation to existing PPS Profit-Share Accounts and also provides a benefit under the PPS Cross-Holdings Booster initiative. For many of our members, this can result in effectively paying nothing for their indemnity cover.
PSSA Newsletter # 44 dated 18th June 2021 outlined the benefits of the new Professional Indemnity Insurance as follows:
Dear PSSA Member
Introducing PPS Health Professions Indemnity
We are
excited to announce a change to the professional indemnity product offering
which has been negotiated for you. Together with our long-standing business
partner, PPS, we have made important enhancements to the product. These have
been designed to provide greater value to those members of the Society who
choose to make use of this product. As from 1 July 2021, the PSSA Professional
Indemnity product will be directly underwritten by PPS Health Professions
Indemnity, a division of PPS Short-Term Insurance Company Limited.
The strategic objective of PPS Health Professions Indemnity is to provide comprehensive
quality indemnity protection, delivered through excellent service,
at a fair premium to ensure long-term sustainability.
It is with this objective in mind that the following significant improvements
to the insurance cover provided have been made.
• Cover is no longer provided on a group scheme basis, meaning that every
insured professional now benefits from their own personal indemnity limits
providing greater security.
• Insured cover limits have been standardised across the different risk
categories and increased to provide maximum comfort that you are far removed
from possible cover exhaustion.
• Existing retroactive cover dates will be carried forward.
• Contract certainty is provided for late reported claims following termination
of active cover through the contractual Reporting Endorsement benefit.
• Cover enhancements have had a minimum impact on annual premiums and for most,
the annual cost of insurance will be lower in future.
• Direct access to a skilled and experienced servicing team who understands the
impact that reported incidents have on the financial and emotional wellbeing of
insured professionals.
Best of all, being part of the PPS Group product suite, those members with an existing
PPS Profit-Share Account will benefit from additional allocations based on
their annual professional indemnity premiums. What is more, PPS members that do
not already make use of products provided by PPS Short-Term Insurance Company
will benefit from the PPS Cross-Holdings Booster that further enhances existing
Profit-Share Account allocations. Over your professional career this really
adds up and can make a significant contribution to your retirement funding.
For now, the administrative process for new and renewal cover will remain in
place and be facilitated through manual application forms which are familiar to
you. In time though, all business processes related to your professional
indemnity cover will be improved with digital enhancements to ease the
administrative burden on both you and the PSSA team. This will further allow us
to focus our resources on better servicing the evolving needs of our members.
For your information, below are the new risk categories applicable from 1 July
2021. You are also encouraged to refer to the PPS Health Professions Indemnity product brochure and Frequently Asked Questions
embedded with this letter.
Should you have any questions or require any assistance with your professional
indemnity needs, you are welcome to contact us at nikita@pssa.org.za or indemnity@ppshpi.co.za.
Premium Structure – effective 1 July 2021
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