Medical Negligence, Compensation and law in India: How much is just and fair...?
Dr Kunal Saha was a doctor in the United States and came to India with his wife, Anuradha, in April 1998. She complained of fever and itching and was treated by Dr Sukumar Mukherjee and later at the AMRI hospital in Kolkata. Her condition deteriorated and she was taken to the Breach Candy Hospital in Mumbai, where she passed away in May 1998. It was established that the doctors and the hospital had been negligent. Kunal filed for civil compensation of almost Rs.100 crores in the consumer court – National Consumer Dispute Redressal Commission (NCDRC) – and after a 15 year legal battle was awarded Rs. Six crores plus interest by the Supreme Court of India in October 2013.
2. JUST COMPENSATION:
It is difficult to define ‘just compensation,’ however, in Sarla Verma’s case3 the Supreme Court discussed it with a lot of clarity and precision. However, it still is open to interpretation. It was observed: “Compensation awarded does not become 'just compensation' merely because the Tribunal considers it to be just…Just compensation is adequate compensation which is fair and equitable, on the facts and circumstances of the case, to make good the loss suffered as a result of the wrong, as far as money can do so, by applying the well settled principles relating to award of compensation. It is not intended to be a bonanza, largesse or source of profit…Assessment of compensation though involving certain hypothetical considerations, should nevertheless be objective. Justice and justness emanate from equality in treatment, consistency and thoroughness in adjudication, and fairness and uniformity in the decision making process and the decisions”4 The courts were grappling with serious issues of inconsistency. In the same case, the Supreme Court also observed that different courts and tribunals in the country after exercising judicial discretion in determining the amount of compensation in an inconsistent manner, which led to uncertainty and unpredictability, causing anxiety to the claimants and also leaving room for arbitrariness. The Supreme Court emphasised that there was a need to have just, fair, and adequate compensation. It observed: “The lack of uniformity and consistency in awarding compensation has been a matter of grave concern…If different Tribunals calculate compensation differently on the same facts, the claimant, the litigant, the common man will be confused, perplexed and bewildered. If there is significant divergence .
3. THE MULTIPLIER METHOD:
The strongest argument in favour of the multiplier method is that the method ensures uniformity and consistency in the decisions. The Supreme Court discussed it in great detail in Sarla Verma’s caes and had laid emphasis on several earlier decisions – three in particular, viz., Susamma6 , Trilok Chandra7 , and Charlie8 – in which the multipliers have been determined for the purpose of motor vehicles law. In a catena of judgments, the Supreme Court of India has decided, particularly for deaths resulting due to no-fault accidents under the motor vehicles law, that the multiplier method is the most suitable method to determine compensation in a prompt and efficacious manner. Contrary to the multiplier method, some of the courts award lump-sum compensation, which may be punitive and exemplary in nature to achieve two purposes: send a very strong signal that such type of cases would be dealt in a very strict manner, and also make available adequate sum of money for the survivor so that life can be led in a reasonable manner in the absence of the deceased. However, awarding a lump-sum amount may bring into arbitrariness, which at times may be whimsical and fanciful, and, therefore, according to one school of thought, it is better to adopt the multiplier method which ensures a systematic calculation in an objective manner. The Supreme Court had observed in Susamma case: “We indicate that the multiplier method is the appropriate method, a departure from which can only be justified ill rare and extraordinary circumstances and very exceptional cases… Usually in English Courts the operative multiplier rarely exceeds 16 as maximum. This will come down accordingly as the age of the deceased person (or that of the dependents, whichever is higher) goes up.”9 The multiplier method, primarily, uses two numbers – the multiplicand and the multiplier – to arrive at a number, which shall be the compensation. Typically, one of the numbers – the multiplicand – is the quantum of compensation determined for every year’s loss of earning minus the amount the victim would have spent on himself, and the other number – the multiplier – is the difference between the average life, as per the life expectancy data available, and the age of the deceased minus the number of years for which he would be unproductive, and also taking into account any other risk factors of bad health, accident, etc. which would have shortened the productive age without any negative contribution of the medical negligence. Thus, the multiplier used for arriving at the compensation is much lesser than simply the difference between average age and the age at the time of suffering from medical negligence. For instance, if the loss of earning per year is ‘p’, the average life of a similar person as the deceased is ‘q’, and the age of the deceased was ‘r’, then the multiplier will not be (q-r) , but much lesser than this number. Let the multiplier shall be ‘s’. In such a case the compensation shall be equal to [p x s] and not [p x (q – r)]. The number ‘s’ to be used as the multiplier raises serious issues about the manner in which it has to be arrived at by the courts.
Courts in India have preferred the multiplier method as mentioned in the Davies case10. It is a landmark and oftcited judgment. Lord Wright in 1942 gave the following reasoning: “The scale must go down heavily against the figure attacked if the appellate court is to interfere, whether on the ground of excess or insufficiency. In the case of the appellant, Mrs. Williams, I think the judge has awarded a wholly inadequate sum. There is no question here of what may be called sentimental damage, bereavement or pain and suffering. It is a hard matter of pounds, shillings and pence, subject to the element of reasonable future probabilities. The starting point is the amount of wages which the deceased was earning, the ascertainment of which to some extent may depend on the regularity of his employment. Then there is an estimate of how much was required or expended for his own personal and living expenses. The balance will give a datum or basic figure which will generally be turned into a lump sum by taking a certain number of years' purchase. That sum, however, has to be taxed down by having due regard to uncertainties, for instance, that the widow might have again married and thus ceased to be dependent, and other like matters of speculation and doubt. It seems as if the award of 250l. was based on something like three-and-a-half years' purchase of the basic figure. This appears to me to be out of all proportion and much too low. I should, after allowing for all reasonably probable chances of the diminution of the loss, accept the figure taken by Luxmoore L.J. of 750l. as being not unfair, and I should increase the damages recoverable by the appellant, Mrs. Williams, accordingly. In that respect I should allow her appeal. Otherwise the appeal fails in her case, and it fails entirely in the case of the other appellant. I agree with the motion proposed by the noble and learned Lord on the Woolsack.”11 Application in Sarla Verma Case In 2009, the Supreme Court in Sarla Verma case, applied the method used in Davies case.
The case briefly is as follows. In 1988, Rajinder Prakash, aged 38 years, died in an accident with a Delhi transport Corporation bus. At that time he was working as a scientist in the Indian Council of Agricultural Research drawing a monthly salary of Rs. 3402/-and was survived by his wife, three minor children, parents and grandfather. The family filed a claim for Rs. 16 lakhs before the Motor Accidents Claims Tribunal, which used the multiplier 22 and awarded about Rs. 6 lakhs with interest. The family appealed in the Delhi High Court which used the multiplier of 13 and a different – higher – multiplicand and awarded a little more than Rs. 7 lakhs with interest. Dissatisfied with the manner the multiplier method was used by the Delhi High Court, the family appealed in the Supreme Court. After analysing the case in detail, the Supreme Court held that the multiplicand was correctly determined by the Delhi High Court, however, the multiplier should not be 13, but should be 15 instead, which increase the compensation to a little less than Rs. 9 lakhs. The court followed the Davies case and did not proceed with the multiplier of 22, rather it used a much lower number, i.e., 1
MEDICAL NEGLIGENCE AND COMPENSATION
Medical negligence by doctors and hospitals, once established by the trial court, very well conveys that the conduct of the medical professionals – doctors, hospital administration, other hospital staff, etc. – was not upto the mark and hence, they must be held liable for deficiency in service, as entailed in the consumer law in India.12 What was the degree of this deficiency depends on the degree of negligence, which can either be slight, normal, or gross. If the negligence was gross, it almost borders with intentional conduct which may be even penalised under the criminal law of the country, however, under the civil law for award of compensation, the quantum has to be determined by the consumer courts. By no stretch of imagination, the court should award a paltry sum for gross negligence. And, the same is true the other way round – exemplary compensation need not be awarded in case of slight or normal negligence.
Dr Kunal Saha was a doctor in the United States and came to India with his wife, Anuradha, in April 1998. She complained of fever and itching and was treated by Dr Sukumar Mukherjee and later at the AMRI hospital in Kolkata. Her condition deteriorated and she was taken to the Breach Candy Hospital in Mumbai, where she passed away in May 1998. It was established that the doctors and the hospital had been negligent. Kunal filed for civil compensation of almost Rs.100 crores in the consumer court – National Consumer Dispute Redressal Commission (NCDRC) – and after a 15 year legal battle was awarded Rs. Six crores plus interest by the Supreme Court of India in October 2013.
2. JUST COMPENSATION:
It is difficult to define ‘just compensation,’ however, in Sarla Verma’s case3 the Supreme Court discussed it with a lot of clarity and precision. However, it still is open to interpretation. It was observed: “Compensation awarded does not become 'just compensation' merely because the Tribunal considers it to be just…Just compensation is adequate compensation which is fair and equitable, on the facts and circumstances of the case, to make good the loss suffered as a result of the wrong, as far as money can do so, by applying the well settled principles relating to award of compensation. It is not intended to be a bonanza, largesse or source of profit…Assessment of compensation though involving certain hypothetical considerations, should nevertheless be objective. Justice and justness emanate from equality in treatment, consistency and thoroughness in adjudication, and fairness and uniformity in the decision making process and the decisions”4 The courts were grappling with serious issues of inconsistency. In the same case, the Supreme Court also observed that different courts and tribunals in the country after exercising judicial discretion in determining the amount of compensation in an inconsistent manner, which led to uncertainty and unpredictability, causing anxiety to the claimants and also leaving room for arbitrariness. The Supreme Court emphasised that there was a need to have just, fair, and adequate compensation. It observed: “The lack of uniformity and consistency in awarding compensation has been a matter of grave concern…If different Tribunals calculate compensation differently on the same facts, the claimant, the litigant, the common man will be confused, perplexed and bewildered. If there is significant divergence .
3. THE MULTIPLIER METHOD:
The strongest argument in favour of the multiplier method is that the method ensures uniformity and consistency in the decisions. The Supreme Court discussed it in great detail in Sarla Verma’s caes and had laid emphasis on several earlier decisions – three in particular, viz., Susamma6 , Trilok Chandra7 , and Charlie8 – in which the multipliers have been determined for the purpose of motor vehicles law. In a catena of judgments, the Supreme Court of India has decided, particularly for deaths resulting due to no-fault accidents under the motor vehicles law, that the multiplier method is the most suitable method to determine compensation in a prompt and efficacious manner. Contrary to the multiplier method, some of the courts award lump-sum compensation, which may be punitive and exemplary in nature to achieve two purposes: send a very strong signal that such type of cases would be dealt in a very strict manner, and also make available adequate sum of money for the survivor so that life can be led in a reasonable manner in the absence of the deceased. However, awarding a lump-sum amount may bring into arbitrariness, which at times may be whimsical and fanciful, and, therefore, according to one school of thought, it is better to adopt the multiplier method which ensures a systematic calculation in an objective manner. The Supreme Court had observed in Susamma case: “We indicate that the multiplier method is the appropriate method, a departure from which can only be justified ill rare and extraordinary circumstances and very exceptional cases… Usually in English Courts the operative multiplier rarely exceeds 16 as maximum. This will come down accordingly as the age of the deceased person (or that of the dependents, whichever is higher) goes up.”9 The multiplier method, primarily, uses two numbers – the multiplicand and the multiplier – to arrive at a number, which shall be the compensation. Typically, one of the numbers – the multiplicand – is the quantum of compensation determined for every year’s loss of earning minus the amount the victim would have spent on himself, and the other number – the multiplier – is the difference between the average life, as per the life expectancy data available, and the age of the deceased minus the number of years for which he would be unproductive, and also taking into account any other risk factors of bad health, accident, etc. which would have shortened the productive age without any negative contribution of the medical negligence. Thus, the multiplier used for arriving at the compensation is much lesser than simply the difference between average age and the age at the time of suffering from medical negligence. For instance, if the loss of earning per year is ‘p’, the average life of a similar person as the deceased is ‘q’, and the age of the deceased was ‘r’, then the multiplier will not be (q-r) , but much lesser than this number. Let the multiplier shall be ‘s’. In such a case the compensation shall be equal to [p x s] and not [p x (q – r)]. The number ‘s’ to be used as the multiplier raises serious issues about the manner in which it has to be arrived at by the courts.
Courts in India have preferred the multiplier method as mentioned in the Davies case10. It is a landmark and oftcited judgment. Lord Wright in 1942 gave the following reasoning: “The scale must go down heavily against the figure attacked if the appellate court is to interfere, whether on the ground of excess or insufficiency. In the case of the appellant, Mrs. Williams, I think the judge has awarded a wholly inadequate sum. There is no question here of what may be called sentimental damage, bereavement or pain and suffering. It is a hard matter of pounds, shillings and pence, subject to the element of reasonable future probabilities. The starting point is the amount of wages which the deceased was earning, the ascertainment of which to some extent may depend on the regularity of his employment. Then there is an estimate of how much was required or expended for his own personal and living expenses. The balance will give a datum or basic figure which will generally be turned into a lump sum by taking a certain number of years' purchase. That sum, however, has to be taxed down by having due regard to uncertainties, for instance, that the widow might have again married and thus ceased to be dependent, and other like matters of speculation and doubt. It seems as if the award of 250l. was based on something like three-and-a-half years' purchase of the basic figure. This appears to me to be out of all proportion and much too low. I should, after allowing for all reasonably probable chances of the diminution of the loss, accept the figure taken by Luxmoore L.J. of 750l. as being not unfair, and I should increase the damages recoverable by the appellant, Mrs. Williams, accordingly. In that respect I should allow her appeal. Otherwise the appeal fails in her case, and it fails entirely in the case of the other appellant. I agree with the motion proposed by the noble and learned Lord on the Woolsack.”11 Application in Sarla Verma Case In 2009, the Supreme Court in Sarla Verma case, applied the method used in Davies case.
The case briefly is as follows. In 1988, Rajinder Prakash, aged 38 years, died in an accident with a Delhi transport Corporation bus. At that time he was working as a scientist in the Indian Council of Agricultural Research drawing a monthly salary of Rs. 3402/-and was survived by his wife, three minor children, parents and grandfather. The family filed a claim for Rs. 16 lakhs before the Motor Accidents Claims Tribunal, which used the multiplier 22 and awarded about Rs. 6 lakhs with interest. The family appealed in the Delhi High Court which used the multiplier of 13 and a different – higher – multiplicand and awarded a little more than Rs. 7 lakhs with interest. Dissatisfied with the manner the multiplier method was used by the Delhi High Court, the family appealed in the Supreme Court. After analysing the case in detail, the Supreme Court held that the multiplicand was correctly determined by the Delhi High Court, however, the multiplier should not be 13, but should be 15 instead, which increase the compensation to a little less than Rs. 9 lakhs. The court followed the Davies case and did not proceed with the multiplier of 22, rather it used a much lower number, i.e., 1
MEDICAL NEGLIGENCE AND COMPENSATION
Medical negligence by doctors and hospitals, once established by the trial court, very well conveys that the conduct of the medical professionals – doctors, hospital administration, other hospital staff, etc. – was not upto the mark and hence, they must be held liable for deficiency in service, as entailed in the consumer law in India.12 What was the degree of this deficiency depends on the degree of negligence, which can either be slight, normal, or gross. If the negligence was gross, it almost borders with intentional conduct which may be even penalised under the criminal law of the country, however, under the civil law for award of compensation, the quantum has to be determined by the consumer courts. By no stretch of imagination, the court should award a paltry sum for gross negligence. And, the same is true the other way round – exemplary compensation need not be awarded in case of slight or normal negligence.
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