Chapter 31 PROFESSIONAL LIABILITY

Physicians today face the real potential for civil liability. Whenever someone undertakes to render assistance based on licensed, professional expertise, the likelihood exists that one or more recipients will seek legal restitution for supposed wrongs. In Nevada, the procedure for prosecuting a malpractice claim against a physician is specified in the Nevada Revised Statutes, Chapter 41A. The standards of proof required and the exceptions to a finding of negligence are also codified. The statutes, and the case law interpretations, are designed to protect both the plaintiff as well as the physician. There is also, in Nevada, the possibility of criminal prosecution for “criminal neglect of patients.” In addition to facing civil liability for malpractice, a physician providing unacceptable care by industry standards, runs the risk of a felony conviction.

This chapter touches briefly on the sources of liability (and criminal prosecution) found in the Nevada Revised Statutes. Once a decision has been made to initiate a malpractice action against a physician, there are very specific steps that must be followed in order for the plaintiff to maintain a viable claim. The sections entitled “Sources of Liability” and “Claim Submission” outline the procedures usually required of the plaintiff in a malpractice. Even if the proper procedures are followed by the plaintiff, and the case were to proceed to trial, the standards of proof required for a finding of liability are fairly high, and should be understood by any physician looking to defend against a malpractice action. The “Settlement Conference” section discusses the requirements for expert witnesses and other sources of technical testimony and standards of proof. (The requirements for expert witnesses are covered in more detail in the “Expert Witness Testimony” chapter). Finally, while significant damage awards are possible in medical malpractice actions, there are limitations and protections which are detailed in the final section, “Standards of Proof.”

The most frequently source of liability in the medical profession is malpractice. In Nevada, “medical malpractice” is defined as “the failure of a physician, hospital or employee of a hospital, in rendering services, to use the reasonable care, skill or knowledge ordinarily used under similar circumstances.” NRS 41A.009. It is interesting to note that malpractice, like many other threshold standards of conduct in the medical profession, is based on the “reasonable caregiver” standard. It is not a matter of simply assessing the actions of the physician or hospital, but comparing those actions to how a “reasonable” physician or hospital would act under similar circumstances. Thus, even if a physician believes that he has done all that is necessary to treat a patient, if the plaintiff can prove, usually through expert witnesses, that the standard of reasonable care required additional treatment steps, the physician may be found liable for malpractice. On the other hand, depending on the circumstances, the flexible reasonable care standard can be fairly lax, such as in emergency situations, thereby imposing a difficult barrier for the plaintiff. As we will see in Section 5.3, this “reasonable caregiver” standard is the principal reason Nevada requires review and recommendations by a screening panel before a medical malpractice action can proceed to trial..

Unfortunately for the physician, malpractice or “negligence” is not the only source of liability in Nevada. In fact, if a cause of action for malpractice is not available, or fails for any number of reasons, the physician may be sued under the legal theory that he committed an intentional tort. For instance, in Jones v. Wilkin, 111 Nev.1335, 905 P.2d. 166 (1995), plaintiff failed to have her claims reviewed by a medical screening board, as required for malpractice claims. Despite this administrative “oversight”, the Supreme Court of Nevada ruled that since the allegations sounded in tort (intentional tort), not malpractice, the plaintiff was not required to submit the claim to a screening board, and was not, therefore, precluded from seeking restitution. Thus, NRS 41.130, “Liability for Personal Injury,” is applicable in cases involving medical treatment, and may be a source of liability for the physician, even if the legal standard and administrative requirements for malpractice are not met.

Perhaps the most frightening and threatening source of “liability” is the criminal code. Under NRS 200.495, a physician or “professional caretaker” may be guilty of criminal neglect” if:

1. The caretaker’s acts, or omissions, are more than simply negligent, but are aggravated, reckless or gross;

2. The conduct is such a departure from ordinarily prudent conduct that it constitutes disregard for danger to human life or indifference to the possible consequences;

4. The resulting danger to human life stems not from “inattention, mistaken judgment or misadventure”, but from “aggravated, reckless or grossly negligent act or omission.”

Depending on the extent of the patient’s injuries, including death, a verdict of guilty may bring a felony or misdemeanor conviction, with up to 20 years in prison (or less if the patient does not die, or if there is no substantial bodily harm). There are exceptions identified in the statute for patients who request no medical treatment other than spiritual prayer, as well as for those with a valid declaration to withhold life-sustaining treatment. In these cases, a patient is not considered “neglected” unless other circumstances exist beyond these exceptions.

The Nevada code does offer protection to those who attempt to render emergency medical assistance. Under NRS 41.500, in the absence of “gross negligence,” volunteers and other medical emergency personnel are insulated from civil liability if they fall into one of the following categories: a good Samaritan rendering aid “gratuitously and in good faith”; a volunteer ambulance driver or attendant who renders emergency care in good faith; an appointed member of a volunteer ambulance service performing services in good faith; a member of a search and rescue team under the direction of the county sheriff, acting in good faith; an employee or volunteer of a public fire fighting agency; a person trained in CPR, or rendering CPR under the direction of a dispatcher, in other than his or her normal employment capacity, to include those rendering care on public school grounds or during the transporting of pupils to and from public school grounds. This statute also provides protection, in the absence of “gross negligence,” for those trained in the use of automatic external defibrillators.

A similar degree of “protection” is available for medical personnel under NRS 41.505. Physicians and registered nurses, giving direction to emergency medical personnel at the scene of an emergency, as well as the emergency personnel themselves, are not liable for civil damages in the absence of gross negligence. However, licensed medical caregivers, licensed under NRS 630, 632 or 633, rendering care in a medical facility, are not immune from civil liability if there is a pre-existing patient-caregiver relationship.

NRS 41.505 addresses one or two other unusual scenarios. Licensed caregivers rendering aid to a pregnant woman for whom they have not previously provided prenatal or obstetrical care, are not liable in the absence of gross negligence, if the woman’s injuries can be traced to the lack of previous care. Likewise, retired caregivers rendering aid “gratuitously and in good faith” to indigent persons are generally immune from liability. The keys are always the lack of “gross negligence” and the “good faith” effort of the caregiver.

Finally, there are certain situations where the Nevada code specifically precludes a finding of liability that, to the casual observer, may seem intuitively obvious. First, observers of a practitioner rendering care, observing in an effort to improve their skills and refraining from the rendering of any assistance, are immune from liability. NRS 629.081. Second, a physician or hospital that fails to withhold life-sustaining treatment, in direct contradiction to a patient’s declaration, is not civilly or criminally liable if the patient can no longer communicate his or her wishes, and if the treating physician believes withholding or withdrawing care is not in the patient’s best interest. NRS 449.640. In both of these instances, common sense would dictate that findings of liability are counter-productive for society as a whole.

In sum, civil and criminal negligence may result from reckless and grossly negligent conduct. Good faith attempts to render aid or otherwise provide competent, reasonable medical treatment should not, in almost all instances, subject the physician to civil suit or criminal convictions, unless the physician acted with gross negligence.

The state of Nevada attempts to ensure that the medical profession, not just the lawyers and the courts, are intimately involved in a finding of medical malpractice. Toward that end, the state requires that all potential medical malpractice cases be reviewed by an “appropriate” screening panel before the case is filed with the courts.^[1] NRS 41A.016 spells out this requirement. NRS 41A.016 also provides for the admissibility of the panel’s written findings in the subsequent court case; however, no other information concerning the panel’s procedures or deliberations is admissible. Likewise, members of the panel may not be called to testify. Until July 1999, this statute applied in dental malpractice cases as well as medical ones. The statute that took effect in July 1999 removed any reference to the dental profession.

Courts have recognized the benefit of the screening panel process, and view the panel as a way to prevent frivolous law suits from going forward, encourage settlements, and drive down the cost of health care and malpractice insurance. Jain v. McFarland, 109 Nev.465, 851 P.2d 450 (1993). While a finding by the screening panel is not conclusive evidence, and the injured patient may proceed with his or her suit despite what the panel has to say, the overall goal of judicial efficiency is well served by the panels. The court has no discretion in this matter, and the requirements of NRS 41A.016 must be applied if the case is founded on a claim of medical malpractice. Truck Ins. Exch. v. Tetzlaff, 683 F.Supp. 223 (D. Nev. 1988). As was discussed with the Jones case earlier, however, cases alleging negligent medical malpractice are not the only source of liability, and only those medical malpractice cases, not cases alleging intentional torts or criminal actions, need go before the panel.

NRS 41A.039 deals with the procedural aspects of filing a complaint and seeking panel review of the case. The statute details the timelines, fees, and procedural steps that must be followed for a panel review. A physician or hospital involved in a medical malpractice case should pay careful attention to these requirements, and must ensure that the plaintiff does not violate these standards. As with NRS 41A.016, there is a new version of the statute that took effect in July 1999.

The decision of a screening panel may affect several steps in the medical malpractice process. If the panel decides that the claim has merit, the findings of the panel may be admitted into evidence. NRS 41A.016(2). If the case goes forward, a mandatory settlement conference must be held (see “Settlement Conference,” below ). If the determination is not in favor of the claimant, that person may still file a complaint in the Nevada district court. If the plaintiff chooses to file a complaint despite an unfavorable ruling from the panel, he runs the risk of being forced to pay the defendant physician’s “reasonable costs and attorney’s fees, in the event that the plaintiff fails to obtain a favorable judgment through the courts. NRS 41A.056(2). If no decision is reached by the panel, the case may go forward at the discretion of the (allegedly) “injured” party. NRS 41A.056(3). Further, if a claim is filed with the courts, it cannot name a party not previously considered by the screening panel. NRS 41A.056(4).

The screening panel process keeps the medical profession at the forefront of policing its own ranks, while simultaneously reducing the number of frivolous cases going forward to the courts. While not a prohibition on the rights of individuals to seek redress, the screening panel process helps to ensure that the rights of all parties are considered and protected.

The pre-trial settlement conference process deserves special mention. The settlement conference holds the promise that all parties will be fairly and impartially treated once a finding of liability is likely (a finding of “probable malpractice” by the Screening Panel). NRS 41A.059 provides the administrative details for convening the conference. In general, all parties, their representatives, and their legal representation must present themselves before a randomly-selected judge other than the judge assigned the case. This includes: the plaintiff; the defendant; the representative from the defendant’s insurer; the hospitals insurance representative (if applicable); and, legal counsel. NRS 41A.059(1). The purpose of the conference is to determine the extent of plaintiff’s damages, and to encourage the parties to agree to a settlement based on the judge’s valuation of the case.

NRS 41A.059 provides the requirements and timelines for scheduling the conference and responding to the determinations of the settlement conference judge. These requirements should be heeded by plaintiff and defendant alike. Within 15 days of the conference, the judge must determine the reasonable value of the claim and notify the parties. NRS 41A.059(5). Once notified, the defendant has two choices. Within 14 days, the defendant may offer plaintiff the amount specified, as a settlement of the case, or he may reject the judge’s determination. NRS 41A.059(6). Rejection of the determination, or rejection of the offer by the plaintiff, however, is not risk free. Should the rejected party prevail at trial, or should the amount of award be different than the settlement offer, the party that rejected the lower determination (defendant) or the higher offer (plaintiff), must pay reasonable costs and attorney’s fees from the date of the rejection forward. NRS 41A.059(6) & (7). Thus, for example, if on the June 1, 1999 the defendant physician accepts the judge’s determination of the value of the case ($10,000) after the settlement conference, offers the plaintiff $10,000, and the plaintiff rejects the offer, the plaintiff will be responsible for the physician’s reasonable costs and attorney’s fees from June 1, 1999 until the close of the trial if the plaintiff fails to recover at least $10,000 at the trial. In this way public policy encourages the use of the settlement conference, and the subsequent case valuation by the judge, to streamline the litigation process.

In a profession based on professional opinion regarding treatment and a lack of guarantees regarding success, there must be a high standard of proof required before a physician can be found negligent and civilly liable. Under NRS 41A.100, before liability for death or injury may be imposed based on negligent care, either “expert medical testimony, material from recognized texts or treatises, or the regulations of the licensed medical facility wherein the alleged negligence occurred” must be presented to establish a deviation from acceptable standards of care and to establish causation. NRS 41A.100(1). There are, however, statutorily recognized exceptions to this requirement, for acts that best fall within the legal principle of res ipsa loquitur (the act doesn’t ordinarily occur in the absence of negligence). The specific exceptions include:

6. Foreign substances, other than medication or prosthetic devices left in the body;

2. An explosion or fire, during the course of treatment, originating with a substance used in treatment;

4. Injury to a part of the body not involved in treatment or proximate thereto; and,

8. A surgical procedure was performed on the wrong patient or wrong part of a patient’s body.

If one or more of these events is found to have occurred, a rebuttable presumption of negligence arises and “expert” testimony or evidence is not required. NRS 41A.100. For instance, because surgical sponges or clamps are not usually left in a patient’s body unless the surgeon (or another practitioner) was negligent, and the negligence is clear enough that expert witnesses do not need to explain the applicable standard of care to the jurors, the plaintiff is not required to provide expert testimony to prove negligence. The Nevada courts have upheld the constitutionality of NRS 41A.100, and have required a jury instruction on res ipsa loquitur when one of the enumerated events has occurred. Johnson v. Egtedar, 112 Nev. 428, 915 P.2d. 271 (1996).

Causation is always a hotly debated topic in litigation, and it is often difficult for the plaintiff to establish. In general, for a plaintiff to prevail in a medical malpractice case, he or she must establish that: (1) the physician’s conduct departed from accepted standards of care; (2) the conduct was the actual and proximate (legal) cause of the injuries; and (3) damages resulted. Prabhu v. Levine, 112 Nev. 1538, 1543, 930 P.2d 103, 107 (1996). Almost inevitably, a question arises as to the degree of causation required before liability can be assessed. In other words, to what degree must the injury causing event be related or connected to the harm caused?

Take, for instance, the following scenario. An obstetrician in a medical group (Physician A), while filling in temporarily for another physician, saw a pregnant woman for a routine check-up. Noting a slight abnormality during an ultrasound, she recommended that the patient return for another ultrasound and an amniocentesis in two weeks. The woman did not return for over two months. She saw her regular obstetrician (Physician B), who performed an ultrasound, and not noticing anything abnormal, did not perform an amniocentesis. Again, one month later, the woman’s regular obstetrician (Physician B) noticed a problem during an ultrasound and ordered an amniocentesis. The patient refused as she could not wait the requisite time, but promised to come back within a week. One month later, without seeing a physician again, the patient went into premature labor and delivered a live infant who died within minutes. She was then informed that the miscarriage could have been prevented because the cause could have been detected months earlier by an amniocentesis. The patient filed a medical malpractice and wrongful death suit against both her regular obstetrician and the fill-in physician (Physician A) who saw her only once. The question then is, should Physician A, who was filling in, be held liable for the death of the infant, and if so, to what extent should she be held liable? The plaintiff would have to prove both actual causation (“but for” the omission of Physician A, the infant would be alive) and proximate causation (would it be legally “fair” to hold Physician A liable for the infant’s death).

In Johnson, the Supreme Court of Nevada outlined the two tests normally applied to determine causation. If more than one potential cause of injury exists and is argued in the case, either of which is sufficient to cause the injury on its own, a more “lenient” standard, the “substantial factor” standard or test is applied. The question then asked is, were either of the physician’s actions a “substantial factor” in bringing about the injury? If so, each physician is liable. If there is only one theory of causation, or if each side offers different theories which are mutually exclusive, the plaintiff has a higher burden to meet, that being to establish that “but for” the acts of the physician, the injuries would not have occurred. The difference can be significant. In wrongful death cases, where a pre-existing illness or injury was present at the time of the physician’s or caregiver’s negligence, the causation issue takes on yet another slant. In many cases the patient has a less than 50%, or perhaps just a 50% chance of survival based on the pre-existing condition alone. If a subsequent negligent act accelerates or causes death, should the negligent physician be liable if the patient was likely to die regardless? The Nevada courts have answered in the affirmative. Under what is referred to as the “loss of chance” doctrine, physicians cannot escape liability by showing a probability that the patient would have died from a pre-existing ailment. However, the total monetary recovery possible for a wrongful death finding may be substantially reduced, although the physician will still be liable and still have to pay. Perez v. Las Vegas Medical Center, 107 Nev. 1, 805 P.2d. 589 (1991).

Chapter 42 of the Nevada Code addresses damages in civil litigation. In causes of action sounding in tort, there are “compensatory damages” awarded based on a finding of negligence and an assessment of the harm suffered by the plaintiff. In addition, if the trier of fact finds the defendant has been guilty of oppression, malice, or fraud, then punitive damages may also be awarded. Punitive damages are designed to go beyond making the plaintiff “whole”, and are directed at punishing defendants for their egregious behavior. NRS 42.005 provides the guidelines for assessing punitive damages. While the issue of damages is usually handled by legal counsel, all physicians should understand the malicious, fraudulent or grossly oppressive behavior in the treatment of patients may lead up to three times the compensatory damages in punitive damages.

The threat of lawsuits is one of the risks associated with the medical profession. Professional liability is avoidable in most instances, through diligence, professionalism, and a reasonable course of treatment. Should the physician find his or her self facing a malpractice action, there are certain statutory checks and balances in place to protect both parties, expedite the process, and (in theory) arrive at a just result. If the physician or care giver is not grossly negligent, malicious or fraudulent in their care, the award of punitive damages should be unavailable.

ADR is by definition a fluid and flexible process that aspires to provide a more delicate and precise instrument for resolving disputes. ADR is flexible in allowing the parties to tailor their dispute resolution mechanism to the particularities of their profession or the nature of their contemplated disputes. Therefore, any ADR experience will depend on the details of the ADR agreement signed by the parties.

Negotiation . Negotiation is perhaps the most common and relatively simple form of contractually consented ADR. Parties agree to make efforts to resolve disputes informally, either in person or through representation, without resorting to the courts. Contractually mandated negotiation clauses do not foreclose remedies at law or court adjudication, but rather signify that the parties pledge to attempt to negotiate any dispute first.

Mediation . In mediation, a neutral third party is enlisted to facilitate or referee the resolution process. Again, mediation may involve the parties themselves, or the parties through representation by legal counsel. The mediator's role is to assist the parties in developing the central issues of the dispute and to identify and narrow realistic avenues for settlement. Mediation can be distinguished from arbitration in that its purpose is to reach a compromise while often preserving an existing relationship. Mediation can be especially appropriate in labor disputes which often produce acrimonious "sick-outs" or other disruptions of the workplace. Certain other disputes involving employees, such as where one employee's version of events is contested by another and each lacks independent verification, may be best resolved through mediation.

Arbitration . Arbitration requires that the parties submit their respective claims to a disinterested third party, either an individual or panel-type body. Many modern employment agreements contain arbitration provisions which, for various reasons discussed, may be more or less advantageous for either party. As with any contractual provision, it is important to remember that it can be custom tailored to fit the needs of the parties.

Arbitration is commenced at the initiation of a party who notifies a contractually related party of their election to arbitrate. This is accomplished through a letter or other notification communicating a demand for arbitration under the relevant contractual provision. Depending on which arbitration body is charged with supervision, the demand letter may also conform to certain other requirements. For example the American Arbitration Association ("AAA") requires that a demand letter disclose with some particularity the nature of the matter in dispute, the amount in controversy, the remedy sought, and the hearing locale sought. An opposing party may, but is not required, to submit a written answer. Appearance at the actual arbitration is required and parties may, but are not required to, have legal representation.

Arbitration proceedings tend to be modeled on judicial proceedings and incorporate adversarial presentation of the disputants contentions. The parties may present evidence and witnesses as well as make oral argument and written submissions. Arbitration awards are usually confirmed with little or no review by a court, at which time they are binding and final. Awards are only overturned by courts in instances of fraud or extreme prejudice.

Arbitrators may be specified by the terms of the contract or chosen by the parties as needed. Advance selection of an arbitration body is advisable to ensure that disputes are properly heard by an experienced professional entity or individual with relevant experience in the medical field. If the parties have not specified a particular body by contract, or cannot agree voluntarily, an arbitration body may be appointed by the court. If the parties cannot agree to an appropriate body but have agreed to abide by the American Arbitration Association rules, the Association will convene a body of their choosing.

Another variation on the selection of arbitrators may require that each party select one or more persons to serve on the panel, and then those members chosen may elect a tie-breaking member. Alternatively, the association may appoint the tie-breaking panel member.

Arbitration proceedings resemble court adjudication in several important ways: parties may present evidence and witnesses who testify under oath, they may cross-examine witnesses presented by the other side, and the arbitrator may issue subpoenas to compel testimony from witnesses or the production of documents. Generally, unless the parties specify otherwise, the Nevada rules of evidence and procedure govern the proceedings.

Arbitration proceedings tend to motivate mutually agreeable solutions because the endeavor is paid for equally by the parties, unless specified otherwise by the contract. Each party is responsible for its own expenses including any legal representation they employ or expert witnesses they call. A "prevailing" party in arbitration does not usually recover costs and fees from their opponent. However, some ADR clauses specifically provide for "winner's spoils" to discourage frivolous actions by requiring the losing party to pay the winner's costs. Many disputes that involve physicians are complex and require legal counsel.

Arbitration determinations should be faster than traditional court litigation. Most arbitration bodies have published rules that provide for a determination within a maximum period of time. AAA rules require publication of the arbitrator’s decision within 30 days of the close of hearings. AAA Commercial Arbitration Rules, Rule 41.

Arbitrators are free to award any relief that they deem appropriate including compensation damages, exemplary damages, punitive damages, injunctive relief, and/or some hybrid that the arbitrator feels is necessary to resolve the dispute. Parties may contractually limit the remedies available to the arbitrator. Arbitrators, however, may not make provisional remedies such as receiver, attachments, preliminary injunctions, or temporary restraining orders because these forms require the supervision or involvement of the court.

Arbitration awards may be adjusted or varied by courts in very limited circumstances, most often for mistake. Mistake includes instances of miscalculation or mistake in the description of a person, thing or property referred to in the award. A court may correct instances where an arbitrator exceeds his or her powers, but the award is correctable without affecting the merits of the decision. A court may also correct defects in the form of the award that do not affect the merits of the controversy. Finally, courts are empowered to modify or overturn arbitration awards entirely where the decision was a product of fraud, collusion, or overbearing by one of the parties.

Courts enforce arbitration awards. The prevailing party submits appropriate documentation of the arbitration award to the court for certification. The award is reviewed only to the extent that the arbitrator competently applied the law and to ensure that the award was not a result of malfeasance by the prevailing party. However, courts are very reluctant to review a decision de novo (beginning anew). Once certified, the arbitration award becomes enforceable. Arbitration awards have been set aside in very limited circumstances for:

1. Corruption, fraud or other undue means of one of the parties, or corruption, fraud or other undue means by the arbitrator. A neutral arbitrator must disclose any conflicts of interest, such as investment or ownership in a company involved in the dispute prior to commencement of proceedings to allow an affected party the opportunity to object. Failure to disclose any conflict of interest may provide grounds to vacate an award;

9. Substantial prejudice of a party's rights by misconduct of the arbitrator, or by refusal of the arbitrator to postpone a hearing or entertain material evidence;

3. An arbitrator's exercise of power in contravention of public policy, such as enforcing a contract of adhesion or an agreement contrary to the unfair trade practices act. An arbitrator may also exceed authority by granting an award in excess of the parameters provided in the ADR clause; or

10. Disqualification of an arbitrator for bias, financial interest in the outcome, or any other material conflict of interest that the arbitrator failed to disclose in advance to the parties.

^[1] This means that if a physician is formally accused of medical malpractice and the complaint proceeds to the Medical-Legal Screening Panel and no farther, the physician has not been sued for medical malpractice because a medical malpractice case cannot be filed before evaluation by the Panel. Thus, there should be no requirement for reporting such a complaint to any agency or on any application or reapplication for staff privileges.