#healthcare

Module Overview

Doctrine of respondeat superior/vicarious liability

An employer may be liable for an unauthorized tort committed by his employee, even one that is in flagrant disobedience of his instructions, if the tort was committed by the employee in the course of his/her employment. This is a form of liability known as vicarious liability or imputed liability and is based on the doctrine of respondeat superior ("let the superior respond" or "let the one in the superior position be responsible").

The rationale of this doctrine is based on the master/servant theory of liability. A person who carries out his business activities through the use of employees should be liable for their tortious conduct in carrying out the business purposes for which they were employed. It is the price the employer pays for enlarging the scope of his business activities. It does not matter how carefully the employer selected the employee, if in fact that employee tortiously injured a third person while engaged in the business of the employer. Moreover, an undisclosed principal/employer is liable for the torts committed by his employee within the scope of employment.

The liability of the principal under respondeat superior is vicarious or derivative and depends on proof of wrongdoing by the employee in the course of his/her employment. Frequently, both principal/employer and employee are defendants in the same suit. If the employee is not held liable, the principal/employer is not liable. A principal/employer who is held liable for his/her employee's tort has a right of indemnification against the employee, which is the right to be reimbursed for the amount that he/she was required to pay as a result of the employee's wrongful act. Frequently an employee is not able to reimburse his employer, and the principal must bear the brunt of the liability.

The wrongful act of the employee must be connected with his/her employment and within its scope if the principal/employer is to be held liable for resulting injuries or damage to third persons. For example, Hal is delivering gasoline for Martha. He lights his pipe and negligently throws the blazing match into a pool of gasoline that has dripped on the ground during the delivery. The gasoline ignites. For the resulting harm, Martha is subject to liability because the negligence of the employee delivering the gasoline relates directly to the manner in which he is handling the goods in his custody. But if a chauffeur, while driving his employer's car on an errand for his employer, suddenly decides to use his pistol and shoot at pedestrians on the sidewalk for target practice, the employer would not be liable to the pedestrians. This willful and intentional misconduct is not related to the performance of the services for which the chauffeur was employed.

The same rule applies to tortious conduct of an employee unrelated to his employment. If Page employs Earl to deliver merchandise to Page's customers in a given city, and while driving a delivery truck in going to or returning from a place of delivery Earl negligently causes the truck to hit and injure Fred, Page is liable to Fred for the injuries he sustains. But if, after making the scheduled deliveries, Earl drives the truck to a neighboring city to visit a friend and while doing so negligently causes the truck to hit and injure Dottie, Page is not liable. In this case, Earl is said to have diverted from the scope of his employer's business. He has diverted from the purpose of his employment and was using Page's truck to accomplish his own purposes, not those of his employer. Of course, in all of these situations the wrongdoing agent/employee is personally liable to the injured persons because he committed a tort. (Eberly)

Independent Contractors

Many times the staff we see at the facility are not employees of the organization. Instead these staff are independent contractors. An independent contractor has sole control over how the work assigned is to be accomplished. The person or organization who hired the contractor retains final approval of the completed job or assignment. An example of an independent contract is a physician who is in private practice sees the organization's clients on their property. In the past, the hospital was not liable for the independent contractor's mistakes because this person was not an employee so there was no legal relationship. However, that view has slowly been changing. Healthcare organizations can be held liable for the negligence of an independent contractor. The reasoning behind this is:

1. Most patients do not select their providers now. It is done by the organization or insurance plan;

2. Patients are using the emergency room for after hour issues;

3. Healthcare organizations are increasing the number of employee physicians; and

4. The number of contracts with hospital-based specialists has incresed dramatically.

Corporate Negligence

The corporation owes the general public and its patients certain duties. These duties are derived from statutes, regulations, principles of laws, and the organization's own policies and procedures. When it comes to carrying out these duties, the organization is no different from an individual and can be held accountable. This is called corporate negligence and occurs when a healthcare corporation fails to peform its expected duties. If a patient is injured as a result, the organization can be held liable. Some examples of these duties, which are not related to the employees, include:

1. Use reasonable care in the maintenance of safe facilities and equipment;

2. Select and retain competent physicains:

3. Oversee all persons who practice medicine within their walls; and

4. Formulate, adopt, and enforce rules and policies to ensure quality care.

Corporate negligence is different from vicarious liability. The liability is not attached to employee actions but to the organization itsellf. In most lawsuits, both the employee and organization will be named as defendants.

Sometimes things go wrong in the treatment of a patient. It might be just one of those things or it could be attributed to the negligence of the staff, contractor, or organization. No matter the cause, the courts and public do not take these matters lightly. If it is found to be the fault of the organization, they will have to pay for it. Therefore, it is very important for any organization to ensure that it hires the right staff and follows the required laws and organizational policies. By taking precautions up front, it might just prevent long, drawn out legal battles later on.

Required Readings

Anselmi, K. (2012). Ethics, Law, and Policy. Nurses' Personal Liability vs. Employer's Vicarious Liability. MEDSURG Nursing, 21(1): 45-8.

DeKaye, A. & Naclerio, G. (2012). Suits and scrubs avoiding orange jumpsuits -- volume II: The metamorphosis crook Journal of Health Care Compliance, 14(3),13-18.

Giliker, P. (2011). Vicarious liability or liability for the acts of others in tort: A comparative perspective. Journal of European Tort Law, 2(1), 31-56.

McGinnis, K. (n.d.). Focus on misclassification of workers as independent contractors in the healthcare industry: Are you ready to be audited? Retrieved from http://www.naylornetwork.com/ahh-nwl/articles/index-v2.asp?aid=126671&issueID=22496

Moses, R. & Jones, D. (2011). Physician assistants in health care fraud: Vicarious liability. Journal of Health Care Compliance, 13(2), 51-75.

Norton v Argonaut Insurance Co. 144 So. 2d 249 (La. Ct. App. 1962). Retrieved from http://www.leagle.com/decision-result/?xmldoc/1962393144So2d249_1357.xml/docbase/CSLWAR1-1950-1985

Optional Readings

Baez, H. (2009). Volunteers, victims, and vicarious liability: Why tort law should recognize altruism. University of Louisville Law Review, 48 (2), 221-264.

Bright, L. (2008). Death by corporate negligence. Nursing Older People, 20(4), 14.

Medili, C. (2011). The federal common law of vicarious fiduciary liability under ERISA. University of Michigan Journal of Law Reform, 44(2), 249-313.

Rothermel, C. (2011). Hybrid torts and vicarious liability under the Jones Act: Testing the limits of course and scope.Journal Tulane Maritime Law Journal, 36(1), 289-311.

Saunier, B. (2011). The devil is in the details: Managed care and the unforeseen costs of utilization review as a cost containment mechanism. Issues in Law & Medicine, 27(1), 21-48.