INSURANCE  COMPANY WHEN  REFUSES  TO  INDEMNIFY  NEGLIGENT  DOCTOR

Yet another dimension in medical negligence cases. Honorable National Commission gives no relief to erring doctor who was  found negligent while treating a patient and was slapped with an amount of Rs 2,67,750 as compensation by a  Consumer forum in west Bengal.

 A complaint was filed by one  Mr. Narayan Chandra Saha before a consumer forum in west Bengal against a doctor for negligence and succeeded in it. He filed an execution petition and after receiving the notice,doctor sent it to the insurance company for making the payment to the complainant as he had taken professional indemnity policy from New India Insurance Co. Insurance company refuses to pay the same as they were not informed by the doctor about the case filed against him, neither they were made party in the case.

Doctor after refusal by the insurance company comes before the consumer forum alleging deficiency in services on the part of insurance company .Consumer forum allowed the complaint. An appeal filed by the Insurance company against the order of consumer forum and State commission reverted the order of consumer forum favouring insurance company. Doctor now filed revision petition  before the National commission

National commission in this matter of  Tarunjit Roy(Dr) versus New India Insurance Company went into detail of the case,checked thoroughly the points discussed by the State commission also. National commission is of the view that the clauses referred as terms & conditions specified in the insurance agreement are of vital importance for dealing with the question as to whether insurance company is deficient in services by repudiating the claim of the doctor when the Doctor  has taken professional indemnity policy and has paid the premium .Clause 8.1 to 8.3 of the policy require following acts to be done by the insured doctor;

“The insured shall give written notice to the company as soon as reasonably practicable of any claims made against the insured and give all such additional information as the company may require. Every claim ,writ,summons or process and all documents related to the events shall be forwarded to the company. Further,company will have right but in no case obligation to participate in the proceedings .Company shall not have any obligation  to make payment if insured settles the claim on his own.”

In the present case, insured doctor sent the communication on 17.1.2008 in writing only after the award has been passed against him.No claim ,summons or notice was sent to the company neither it was a party to the proceedings which is a clear violation of the terms .By doing so,insured have deprived the company of his right to watch the proceedings in CF case no39/99  or to know the manner case has been defended by the doctor.Not only this ,insured doctor did not file any appeal against the order passed by the forum .It was other OP in the same matter who filed an appeal no 233/A/2005 before the state commission and succeded. After an appeal is filed  no information about the award was given to the company. Further ,when execution was filed by the complainant Narayan Chandra , Saha for realizing the awarded amount , insurance company was still kept in dark .Under the above circumstances,insurance is in no way deficient in services if they repudiate the claim at this stage.

                        Before dealing with the latest law laid down on the subject  by the National Commission and then confirmed by the Supreme Court, it will be relevant to look into  the background of the situation which had created   concern for the legal lobbies of the country. It was a  death case of a young and talented boy of sixteen year old ,who died in 1996 due to medical negligence of doctors which came before the National commission for adjudication. The boy was given spinal anesthesia  for performing operation whereas such anestheisia is not allowed to the person of this age as per the medical literature available on the subject This wrong application resulted into death of the boy. But no negligence could be proved in this case in 1996 because  Insurance companies jumped in to picture for defence of doctors with battery of emminent lawyers and raised number of preliminary objection and father of the boy was forced to compromise ultimately. This was a very unfortunate situation where Insurance companies  being party in defence defended the geniun case of the complainant with full force without considering the pains of a father who lost his young son.

                        There was  a case again where the similar situation was before consumer redressal agencies and the crucial question was whether Insurance companies be allowed or not to be party in defence with the doctors.

                        The case of  Gurudatta Puri Hospital Lithantripsy Center v/s Nusrat [2002] travelled from District Forum to State commission of  Madhya Pradesh   wherein Doctors remained absent for defending their case and it was only insurance companies present before the forum to defend the negligence of Doctors as defending parties .The case was decided against Doctors.An appeal was filed by Doctors as well as by insurance companies before the State commission. One of the issues before the commission was whether the Insurance Companies should be made party in defence in Doctor’s medical negligence cases. State Commission held ;

 

“The proper and final adjudication of the dispute can be made without impleading the insurance company as a party .Moreover ,the act or rules do not provide for impleading the insurance company as a party …the plea that in case the insurance company denies to indemnify to the insured doctor under the contract of indeminity ,the consumer is further dragged to litigation is not acceptable”

 Hence ,it was made clear that the case can be dealt and decided without the help of insurance companies with the records available with the idea that if insurance companies are brought in the picture, the consequences will be adverse for the consumers causing more delay and harassment by two big giants. Doctors too may also take the things easy if their responsibility is shared by insurance companies.

                       Thereafter National Commission had an occasion to  dealt with the  similar situation while  disposing off two revision petitions from Punjab State commission on different footing though the motive was to safe guard the interest of the consumers only. In those two Revision petitions New India Assurance Company Ltd. V/S Hardip Singh and others  Revision petitions No 2640 AND 2648 Of 2002 arising out of two separate judgements from Punjab State Consumer Dispute Redressal Commission ,the view taken by the National Commission was that if insurance companies are barred from making party, they will have a good case to go in appeal on this very ground. Even if they do not go for appeal, there may be another case by Doctors against insurance company for their claim wherein consumer is a sufferer if dragged in their litigation or  not paid inspite of winning the case against the Doctors.National Commission with the intention to help the consumers allowed insurance companies to be impleaded as party in defence but at the same time defined the role of both ,Doctors as well  as Insurance companies and held that doctors are to defend their cases on merit on their own .Insurance companies will be an agency who will tell about the validity of insurance made and its other relevant espects.i.e admissibility, period of the policy made etc.Any other objections if company has in respect of the policy can also be decided here it self.Further National commission also expressed its disapproval  the way insurance companies had shown their conduct 

‘It is an abuse of the process of the whole system and simply because Insurance company has means to challenge each and every order without regard to the circumstances of the case and its obligation to pay the amount under the policy .It was neither necessary nor proper for the insurance company to take up the cause of the doctors to save its own liability .’

Further,

‘It is the duty of the insurance company to see that frivolous cases are not filed so as to clog the wheels of justice ”

                        This view of National commission was further confirmed by Honourable Supreme Court and now, may it be known to consumers that insurance companies if made party to the case with defendants , it is no more a matter to worry for them as both have to play their own roles and interest of consumer shall be taken care by the consumer protection agencies i.e. Forums and Commissions for getting them justice .

 

 

Dr Prem Lata

Member ,Consumer court[Delhi]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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