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Liability in the absence of a therapeutic relationship

The NSW Court of Appeal recently found a medical treatment provider was liable for personal injury, even though there was never a therapeutic relationship with the person who was injured.

Briefly, a Mr Mason suffered from psychological illness for which he was taking medication. He was remanded in custody on criminal charges, to Parklea Correctional Centre. It was privately operated by GEO Group under contract with the State Government. The contract required GEO to provide psychological and counselling services to inmates.

When Mr Mason was processed at Parklea, he told employees of GEO about his conditions and medications, but he was not prescribed any replacement drugs nor referred for counselling or other treatment. Days later, he jumped from a high level landing and suffered personal injury. He then sued GEO for those personal injuries. That case settled, but a related claim between GEO and its insurer continued because the insurer contended that its policy did not provide cover unless GEO had actually provided (medical) services.

Much of the Court of Appeal decision related to interpreting the actual meaning of the policy of insurance. Ultimately the Court of Appeal held that on a proper reading of the insurance policy, it included liability not only for the provision of healthcare services, but also for a failure to provide them. The insurer, therefore, had to indemnify GEO for its settlement with Mr Mason.

Although the case itself is mainly of interest to insurance lawyers, it potentially has broader ramifications. It is a decision of the highest Court in New South Wales to the effect that medical treatment providers can, in some circumstances, have a legal liability to people with whom there is, and never has been, a therapeutic relationship. Obviously, that would not extend to complete strangers; but there could be circumstances not dissimilar to this case where, for example, a person attended a doctors’ rooms seeking an appointment and gave certain relevant information to a medical receptionist (but did not get an appointment) where a liability might arise. Medical practitioners and allied health professionals would, therefore, be well advised to review their current insurance programme to ensure they are covered for failures to provide treatment, as well as the consequences of actually providing it: AAI Limited v GEO Group Australia Pty Ltd [2017] NSWCA 110.

Liability limited by a scheme approved under the Professional Standard Legislation

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