Aspects of the therapeutic relationship

CHAPTER 5 Aspects of the therapeutic relationship



5.1 Non-tortious legal duties


[5.1.1.] While most attention in health law is given to the law of tort, other legal duties arise in the therapeutic relationship between health professionals and patients. This chapter deals with some of the non-tortious aspects of the therapeutic relationship. It focuses on:


• the contractual relationship between doctors and patients

• the Australian systems for healthcare complaints, and

• the systems of review of professional conduct.


5.2 Contractual relationships and health professionals



[5.2.1] What is a contract?


A contract is a legally binding agreement. A contract creates a relationship between the parties to the agreement, which requires them to act, or refrain from acting, in certain ways for the life of the agreement.


In the healthcare context, contracts most commonly take the form of an agreement by the healthcare professional to provide health services for a fee. However, contracts can take a great variety of forms, and they do not always require the payment of money to be binding: see [5.2.3].


Generally speaking, patients and healthcare providers in private settings are in a contractual relationship. In public settings (such as public hospitals and clinics), patients and healthcare providers will not be in a contractual relationship.



[5.2.2] What form should a contract take?


Most people enter into several contracts a day without even knowing it. The simple purchase of a cup of coffee involves a contract entered into with very little formality (and sometimes without any words being spoken). Contracts like this do not need to take a special form – they are referred to as informal contracts.


In contrast, some contracts are required by law to be in writing to take full effect (for example, contracts for the sale of cars in some jurisdictions). In some very specific situations (for example, the transfer of interests in land), contracts must take the form of a deed, a specially created instrument that has to be witnessed in front of a lawyer. Such contracts are referred to as formal contracts.


Most healthcare contracts do not have to be in writing, and agreements take place through conversations between health professionals and patients (parol contracts). The problem with parol contracts is that it can be difficult to be sure what was agreed to, especially if the parties later disagree about what was expected of them.



[5.2.3] When is a contract formed?


Under the common law, a number of requirements must be met before a contract comes into being.



Intention to enter into a legal relationship


The law presumes in most cases that the parties to an agreement mean that agreement to be legally binding. There are agreements between close family members where the presumption is reversed, and the parties must be able to show that a legally binding agreement was intended. Apart from situations in which healthcare professionals are treating family members, parties to a healthcare agreement are presumed to have had an intention to enter into a legal relationship.



Offer and acceptance


Contracts are formed at the point where, after negotiation, a final offer has been made and that offer has been accepted. In the healthcare context this most commonly occurs after the initial consenting process, when the healthcare professional has given the patient information about treatment options and the patient has agreed to follow a particular course of action: see chapter 6.



Consideration


For a contract to be binding the parties must each provide consideration, which is something of value to the other party. In most healthcare agreements, consideration is payment by the patient and treatment by the health professional.


However, consideration can take forms other than money, such as a promise to act in particular way. The common law does not require the consideration to be adequate, in the sense of representing a market value. All it requires is that the parties themselves have determined that something of value is to pass between them.



Case example


Breen v Williams (1996) 186 CLR 71 involved a patient’s request for medical records relating to procedures she had undergone several years before in relation to her breast implants. The doctor would only agree to release the medical records if he was given an indemnification from any legal action. The patient refused to do this, and argued that the doctor had a duty to provide the records to her. One of the arguments for finding such a duty was that the contract required the disclosure. In that context, Brennan CJ discussed the nature of consideration in healthcare contracts. He stated that:



The consideration for the undertaking may be either a payment, or promise of payment, or reward or submission by the patient, or an undertaking by the patient to submit to the treatment proposed [at 78].


Gummow J also discussed consideration, and indicated that Medicare payments may constitute consideration. He stated that:



The relationship between medical practitioner and patient may engage the law in various respects. Traditionally, there has been a contractual relationship, the medical practitioner performing services in consideration for fees payable by the patient. That established pattern now may require adjustment to accommodate wholly or partly state-operated or financed health schemes, established by statute. The ‘bulk-billing‘ provisions of the Health Insurance Act 1973 (Cth) … provide an example of this.


This case is discussed further below: see [5.2.4].



[5.2.4] What parts of the contract are binding?


All contracts are made up of terms, which set out the binding obligations of each contracting party. Because most healthcare contracts are informal, it can be difficult to discern what terms were actually agreed to.


A term can be an express term. This is a term that has been actually discussed by the parties, for example, in their conversations regarding the agreement, or has been put in writing. In a healthcare contract express terms are often formed by conversations about consent. If written information sheets are provided, these may also make up some of the express terms of the contract.


Many terms are not discussed, but are nevertheless a necessary part of the contract. Think back to the example of buying a cup of coffee. It would be unusual for the purchaser to ask whether the coffee was fit for human consumption – this is assumed to be the case. Such unspoken terms are referred to as implied terms. As the example of the coffee shows, implied terms are often essential to a contract, but may be so obvious that no-one thinks of expressing them. The common law will still treat the contracting parties as being bound by the implied terms.


In healthcare contracts the most commonly implied term is that the doctor will exercise due care and skill when providing treatment.



Case example


In Breen v Williams (1996) 186 CLR 71 (see [5.2.3]), the patient argued that there was an implied term in her contract that the doctor would provide her with her medical records. Gaudron and McHugh JJ discussed implied terms in healthcare contracts.



The doctor–patient relationship is contractual in origin. In general terms, ‘(a) doctor offers a patient diagnosis, advice and treatment’, the objectives of which are ‘the prolongation of life, the restoration of the patient to full physical and mental health and the alleviation of pain’. Given the informal nature of the relationship, however, a contract between a doctor and a patient rarely contains many express terms. Because that is so, the courts are obliged to formulate the rights and obligations of the parties to the contract. As Lord Wilberforce has put it, in cases where the parties to a contract have not attempted to spell out all the terms of their contract, the function of the court is ‘simply … to establish what the contract is, the parties not having themselves fully stated the terms’. The court does so by implying terms in the contract in accordance with established legal principles.


The patient’s argument was that there was an implied term that the doctor would always act in her best interests, and that this meant he must grant her access to her medical records. This argument was rejected. The court recognised that the primary implied term in the contract was that the doctor would exercise reasonable care and skill in providing treatment. That term did not extend to any right of access to the patient’s medical records.



[5.2.5] Are there other terms that the courts will imply into healthcare contracts?


Yes. Some courts have recognised that there is an implied contractual term of open disclosure, so that a health professional must inform the patient if an error has occurred that leads to, or exacerbates, a personal injury. This is discussed at [4.8.2].


Generally the courts are reluctant to imply terms into contracts, and will only do so where it is necessary for the proper working of the contract.



[5.2.6] What happens when there is a breach of contract?


A contract is said to have been breached if one of the parties fails to carry out their obligations under it. If a very serious breach has occurred the innocent party has the option of terminating the contract and then suing for damages. For less serious breaches the option of termination is not available, and the innocent party must seek damages when the contract has been completed.


Damages are therefore the main common law remedy, and they are calculated on the basis that the innocent party should be placed in the situation they would have been in had the contract been performed. In healthcare contracts the damages awarded for breach of the implied term of reasonable care and skill are very similar to those awarded in negligence cases.


The courts can also order other remedies where a breach of contract has occurred. These include:


• an order that the contract be specifically performed when one party is refusing to comply with their obligations

• an injunction, which is a court order that can be used to prevent a threatened breach of contract.

Both of these are equitable remedies, and courts will insist that other conditions are satisfied; for instance, that the innocent party has behaved fairly (‘comes to the court with clean hands’).



[5.2.7] Are contractual duties overridden by other laws?


No. Contractual duties coexist with the duties owed in other areas like tort law. To that extent disagreements between patients and health professionals may give rise to several overlapping claims. But while claims may overlap, a successful claimant will receive damages for what they have lost, without double dipping.


Contract law has also been enhanced by numerous pieces of fair trading legislation, which make it illegal for a person or corporation to engage in misleading or deceptive conduct in the course of trade and commerce. These provisions apply regardless of whether a contract was properly formed. Claims under this legislation could potentially be made in relation to healthcare practice. At the time of writing there have been no major cases illustrating how this could be done.


Fair trading legislation in the Australian jurisdictions is listed in table 5.2.7.


Table 5.2.7 Australian fair trading legislation






























Cth Trade Practices Act 1974 s 52
ACT Fair Trading Act 1992 s 12
NSW Fair Trading Act 1987 s 42
NT Consumer Affairs & Fair Trading Act 1990 s 42
Qld Fair Trading Act 1989 s 38
SA Fair Trading Act 1987 s 56
Tas Fair Trading Act 1990 s 14
Vic Fair Trading Act 1999 s 9
WA Fair Trading Act 1987 s 10


5.3 Fiduciary duties



[5.3.1] What is a fiduciary duty?


A fiduciary duty is an obligation imposed by equity that requires the obliged person (the fiduciary) to act in the interests of another person (the beneficiary). Fiduciary duties are imposed in circumstances where the beneficiary is particularly weak and vulnerable, and the fiduciary is required to protect the beneficiary’s interests. Common fiduciary duties include obligations of confidence, requirements to disclose conflicts of interest, and special rules pertaining to receiving gifts.


Fiduciary duties can arise in many different professional and social relationships, categorised either by a power imbalance that makes it appropriate for special duties to be imposed on the more powerful party, or by an obligation on one party to act as the other’s representative or agent.


There are also types of relationship that equity recognises as being wholly fiduciary in nature. The fiduciary must act in the interests of the beneficiary in the performance of the obligations pertaining to the relationship. Established fiduciary relationships include guardian–ward, legal practitioner–client, director–company, and priest–parishioner relationships.



Fiduciary duties can be owed by people outside traditionally recognised fiduciary relationships.

Related posts:

  1. Competence
  2. Recognising legal questions in clinical practice
  3. Incompetent patients and end-of-life decisions
  4. Mental health

Stay updated, free articles. Join our Telegram channel
Tags:
Mar 25, 2017 | Posted by in GENERAL SURGERY | Comments Off on Aspects of the therapeutic relationship

Full access? Get Clinical Tree
Get Clinical Tree app for offline access