Case Note: Estimating Future Economic Loss by Probability

Psychological harm and loss of chance — estimating future economic loss by probability.

KS and XT v Calvary Health Care ACT trading as Calvary Hospital and Dr Andrew Foote [2018] ACTSC 84

Reproduced article, originally published in Health Law Bulletin, Issue 26.6, a publication by LexisNexis Australia

In this decision of the ACT Supreme Court, the court assessed damages for future economic loss by a measure of the probability of the plaintiff succeeding in her career aspirations of requalifying as a general practitioner in Australia.

Background

On 5 April 2017, in the decision of KS and XT v Calvary Health Care ACT trading as Calvary Hospital and Dr Andrew Foote, Burns J of the ACT Supreme Court found that an attending obstetrician (Dr Foote) and Calvary Hospital (the hospital) had breached their duty of care to a patient which led to the stillbirth of the patient’s child. In particular, Burns J found that both defendants had:

  • failed to heed the significance of heart rate monitor abnormalities
  • failed to conduct a necessary urgent caesarean section.

In addition, Dr Foote (the second defendant) was found to have failed to recognise that the plaintiff was of a higher risk of stillbirth and failed to properly advise the plaintiff of these risks.

The court awarded the plaintiffs (with the plaintiff’s husband as the second plaintiff) a combined amount of $889,891.15 in damages and apportioned liability at 70% to Dr Foote and 30% to the hospital. The court’s assessment of damages made allowance for the unfulfilled career aspirations of the plaintiff to requalify as a general practitioner (GP) in Australia, having attained her medical qualifications overseas.

KS — career ambitions in Australia and in vitro fertilisation (IVF) treatment

KS (the first plaintiff) moved to Australia from Venezuela in 2007 to live with her husband XT (the second plaintiff).6 In Venezuela, KS was a qualified doctor and worked as an ophthalmologist.

In 2008, KS made inquiries into having her Venezuelan qualifications recognised in Australia. The first step was for KS to take an English test called the International English Language Testing System (IELTS). In September 2008 KS attempted and failed the IELTS. KS unsuccessfully attempted the test a second and third time in January 2009 and December 2010 respectively.

In 2009, to treat infertility, IVF was recommended to KS and an embryo was implanted. The cycle of IVF was successful and KS was informed that she was pregnant. However, 7 weeks into the pregnancy a scan revealed a foetal heart defect, which resulted in KS requiring a chemically-assisted miscarriage.

After a second unsuccessful cycle of IVF, in May 2010 KS was advised that a third cycle of IVF was successful and that she was pregnant with twins. In June, KS was advised that one of the twins did not have a foetal heartbeat, but that the surviving foetus was
healthy.

Consultations with Dr Foote and the stillbirth

In August 2010, KS began seeing Dr Foote, an obstetrician and gynaecologist, in relation to her pregnancy. KS’s estimated due date was 6 January 2011. On 31 December 2010, KS consulted with Dr Foote. The plaintiffs explained that they wanted to have the baby
delivered as soon as possible after the due date as they didn’t want to take any risks. Dr Foote stated that he would be on leave on the due date, but the baby was “perfectly fine” and that it was okay to wait past the estimated due date.16 Arrangements were made for a consultation the week after the due date.

On 11 January 2011, KS attended the hospital expecting to deliver the baby. After an examination, KS was told that she hadn’t started labour and would have to be induced. KS and Dr Foote agreed that she would be induced on 13 January 2011.

On 13 January 2011 the baby was 1 week overdue and as was agreed between KS and Dr Foote, KS was admitted to the hospital to have the baby induced. At the hospital, at around 4.30 pm, a foetal heart rate monitor (cardiotocograph, or CTG) was attached to
KS.

By 4.58 pm abnormalities were apparent in the baby’s heart activity. The significance of these abnormalities was not appropriately assessed by the attending midwife. It was not until somewhere between 5.50 pm and 6 pm that Dr Foote was contacted. At 6 pm
Dr Foote ordered a caesarean section and at 6.35 KS arrived at the operating theatre. A caesarean section was performed by Dr Foote but at about 7 pm the child was stillborn.

Pleadings

The plaintiffs’ claims were pleaded in negligence and essentially contained the same particulars. The relevant particulars pleaded against the hospital and Dr Foote included the:

  • failure to heed the significance of the CTG carried out on KS
  • failure to undertake an urgent caesarean section on KS within 30 minutes of the decision to undertake it

The particulars pleaded solely against Dr Foote included the:

  • failure to properly or adequately advise KS of the proper timing of induction of labour
  • failure to properly or adequately advise KS of the risks of stillbirth

Both of the defendants initially filed defences denying liability, however, during the hearing, the hospital conceded liability.

Decision

Liability of the hospital

Despite the hospital conceding liability, the court determined the liability of the hospital. The court held that the attending midwife had misread the CTG and failed to recognise the significance of the CTG. The court accepted expert evidence that a competent midwife would have recognised the signs of foetal distress and immediately contacted Dr Foote. Consequently, the court held that the hospital had breached its duty to the plaintiff and that these breaches were an operative cause of the stillbirth.

Liability of Dr Foote

The court considered that the plaintiffs’ case against Dr Foote comprised of two parts:

  • alleged antenatal breaches of duty occurring before KS’s admission to the hospital
  • alleged breaches of duty occurring on 13 January at the hospital

With regard to the alleged antenatal breaches, the plaintiffs claimed that Dr Foote had failed to recognise that KS was at a higher risk of stillbirth and failed to adequately advise KS of the risks to KS and her unborn child.

Dr Foote, relying on expert evidence, asserted that a competent Australian obstetrician would not have been expected to offer or recommend an induction of labour earlier than 13 January 2011. The court noted that Dr Foote effectively sought to rely on the defence of peer professional opinion, which for example applies in NSW under s 5O of the Civil Liability Act 2002 (NSW). However, the court noted the absence of an equivalent provision under the law applicable in the ACT.

The court rejected Dr Foote’s reliance on peer professional opinion and considered it incompatible with the decision in Rogers v Whitaker. In that case, the High Court considered the appropriate means of determining the standard of care as follows:

… the standard of care to be observed by a person with some special skill or competence is that of the ordinary skilled person exercising and professing to have that special skill. But, that standard is not determined solely or even primarily by reference to the practice followed or supported by a responsible body of opinion in the relevant profession or trade.

Consequently, the court considered and applied the test set out in the following passage from Rogers v Whitaker:

A doctor has a duty to warn a patient of a material risk inherent in the proposed treatment; a risk is material if, in the circumstances of the particular case, a reasonable person in the patient’s position, if warned of the risk, would be likely to attach significance to it or if the medical practitioner is or should reasonably be aware that the particular patient, if warned of the risk, would be likely to attach significance to it.

The court accepted expert evidence to the effect that KS had an increased risk of stillbirth because of her age, the method of conception and the fact that this was her first pregnancy, and that these risks increased substantially after 38 weeks’ gestation.

By applying the test to the present case, the court unhesitatingly concluded that Dr Foote had a duty to warn KS of the increased risk. When Dr Foote advised the plaintiffs that he would not be available on the estimated due date and suggested the delivery date be
extended until he was available, but did not advise of the increased risk associated with delay, he breached this duty of care.

After finding that Dr Foote was liable for the antenatal breaches of duty the court turned to the alleged breaches on 13 January 2011. The court held that Dr Foote owed a duty to KS to carry out an urgent caesarean section at the earliest possible time after becoming aware of the necessity for such a procedure. Based on the expert evidence, the court was satisfied that a competent obstetrician would have recognised that the CTG trace was abnormal and called for an urgent caesarean section to prevent injury or death to the foetus.

Among other things, it was established that after the decision to conduct the procedure was made, Dr Foote had participated in other non-urgent procedures prior to conducting the caesarean section. The evidence established that Dr Foote perceived no urgency in undertaking the caesarean section. Consequently, the court found that Dr Foote had breached his duty to carry out an urgent caesarean section at the earliest possible time. The court apportioned liability at 30% to the hospital and 70% to Dr Foote.

Assessment of damages

The court’s consideration of damages focused on the assessment of KS’s future economic loss, which was premised on KS’s submission that if it was not for the defendants’ negligence she would have become a qualified GP in Australia. KS had obtained her medical
qualifications in Venezuela, and had worked as a doctor there, but had not become a registered medical practitioner in Australia.

The court accepted that KS was able to engage in her current employment for the foreseeable future, so from that perspective, she had not suffered loss. The court accepted that because of the stillbirth, KS suffers from post-traumatic stress disorder and major depression. As a result, KS suffers from cognitive impairments such as difficulty in concentrating. The court held that, due to KS’s condition, it is unlikely that she would be able to cope with the requirements for having her qualifications recognised in Australia.

KS’s claim for damages relied upon the approach taken in the High Court decision of Malec v JC Hutton Pty Ltd (Malec). In Malec, the High Court considered that the probability of a future event required an adjustment by the court in its award of damages to reflect that degree of probability.

KS’s claim was based upon a future event that may have occurred — her attaining registration as a medical practitioner in Australia being contingent on a number of events. To achieve this, three events had to occur — KS had to:

  • pass the IELTS test
  • pass a medical knowledge test
  • find a GP who was prepared to mentor her for 12 months

The court stated that it could not be said with absolute certainty that any of these events would have occurred.

The court held that, despite KS’s history of not meeting the standard required on the IELTS tests, she had excellent prospects for passing the test and considered the chance of her successfully completing the IELTS test at 80%. The court held that KS had a 90% chance of passing the medical knowledge test, as she was not challenged on the basis of her basic medical knowledge. The third contingency required KS to find another GP prepared to mentor and supervise her for 12 months. The court acknowledged that this was
difficult to assess, but KS’s proficiency in English and Spanish may be attractive for a prospective employer and held that the prospects of KS finding a supervising GP was greater than 70%.

It was acknowledged that the processes used to arrive at the probabilities for the contingent events were not based on any science. By combining the probabilities of the three events occurring, the court considered the probability of KS becoming a qualified GP in Australia at 50%, but for the defendants’ negligence.

As a result, the court did not determine KS’s future economic loss on her past earnings but rather those of a GP and awarded KS $290,321.30 for future economic loss. This amount was reached by calculating the difference between KS’s current earnings and her potential earnings as a GP until the age of 65. The amount was then reduced by 50% based upon the probability that KS would not suffer this loss which was then reduced by a further 15% to allow for normal vicissitudes.

In total KS was awarded $669,518.15. XT was awarded $220,373.00. This amount comprised of general damages and out-of-pocket expenses.

Conclusion

The court’s approach to assessing damages arising as future economic loss was, by its own statement, unscientific. The court identified the contingent events leading to the outcome asserted by the plaintiff (qualification as a GP) to derive the overall probability of that condition being satisfied. The court put this at 50%.

While it was clear that KS held medical qualifications, and she held aspirations to have her qualifications recognised in Australia so that she could work as a doctor, she had not made significant progress towards becoming a GP. Although KS had experience as an
ophthalmologist in Venezuela she had never practised as a GP. To become a GP in Australia, KS was required to overcome three significant hurdles, but KS had not yet completed any of these requirements.

Although KS’s circumstances were relatively unique, the court’s probability-based approach to future economic loss may be applied in relation to other kinds of contingent events.

Reproduced article, originally published in Health Law Bulletin, Issue 26.6, a publication by LexisNexis Australia.

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