This article has been written by Naved Bangi pursuing the Certificate Course in Arbitration: Strategy, Procedure and Drafting from LawSikho. This article has been edited by Aatima Bhatia (Associate, Lawsikho) and Ruchika Mohapatra (Associate, Lawsikho). 

Introduction

In today’s world, arbitration has emerged as the most preferred mode of dispute resolution. Due to the flexible procedural rules, party autonomy, and settling of disputes in a limited time, arbitration today has become the go-to option for everyone. The impact of arbitration has been such that, today most of the contracts comprise an arbitration clause to settle their disputes efficiently through the mode of arbitration to avoid the lengthy process of litigation. In India, the statute pertaining to arbitration is The Arbitration and Conciliation Act 1996. The amendments brought in respect of the above Act have strengthened the present and future of arbitration in India. Some of the remarkable changes brought by the amendments are as follows:

a) Interim measures passed by the tribunal under Section 17 are now at par with the interim measures passed by the court under Section 9.

b) Imposition of time limits on the arbitration process under Section 29A

c) Introduction of the fast track procedure under Section 29B.

d) Increased the certainty of arbitration awards.

All these amendments have made arbitration a go-to dispute resolution mechanism that can even be applied and used by the healthcare industry, which itself has a plethora of cases pending in courts. Especially in the cases pertaining to medical negligence, wherein litigation will cause unnecessary delay hence resulting in delayed justice, arbitration could serve as an appropriate dispute resolution method in such cases rather than alternative dispute resolution. 

Need for arbitration in medical negligence cases 

In the case of  Dr. Balram Prasad vs Dr. Kunal Saha  Civil appeal no. 2867/2012 (famously known as the Anuradha case), Dr. Kunal Saha’s wife- Anuradha died due to negligent medical treatment by three doctors of Kolkata. The court granted compensation of 7 crores to Dr. Kunal Saha after a long battle of 15 years. He visited India 12 times during the case and due to this he also lost his job.

Even though he received compensation, the long process of litigation cost him 15 years and his job. Had the dispute been resolved by arbitration, it would have been resolved in a limited time. In order to avoid such delays, the medical negligence cases in India should  be resolved by the mode of arbitration. Now let us understand what medical negligence is.

Meaning of medical negligence 

Medical negligence could be defined as professional negligence by act or omission by a health care provider in which the treatment provided falls below the accepted standard of practice in the medical community resulting in causing death or injury to the patient. In such cases, there are laws and legal aid that one can recourse to. Justice needs to prevail and any harm or loss due to any unfortunate event needs to be accounted for and avoided in the future. This is extremely important in order to keep the medical fraternity in check and since everybody stands equal before the law, it is important no one gets any unfair advantage simply due to the professional background they behold.  

Arbitrability of medical negligence cases in India

The arbitration laws and consumer laws both aim at providing speedy dispute resolution mechanisms. What if there is a situation in which a consumer dispute has arisen out of an agreement having an arbitration clause, in such a situation the question arises, who would have the jurisdiction whether it be the consumer forum or the matter would be referred to arbitration? Civil liability in medical negligence cases is covered by the Consumer Protection Act 2019. 

Provisions of Arbitration and Consumer Protection Act

Section 8 of the Arbitration and Conciliation Act, 1996 provides that when a matter which is subject of an arbitration agreement is brought before a judicial authority, then in such cases the authority shall refer the matter to arbitration. Section 2(3) of the Arbitration Act also clearly provides that the Act does not affect any other law which bars any disputes from being referred to arbitration.

The Consumer Protection Act does not impose any express bar on consumer disputes being referred to arbitration. A plain and clear reading of the above provisions would make one conclude that if a consumer dispute is arising out of an agreement that contains an arbitration clause then in such a case the dispute would have to be mandatorily referred to arbitration. The case of M/s. Emaar MGF Land Ltd vs Aftab Singh [Review Petition (C) Nos. 2629-2630 in Civil Appeal Nos. 23512-23513 of 2017] has addressed the issue in length. The court in the Emaar MGF case made two very important observations, which are as follows:

a) The Court observed “Every civil or commercial dispute which can be decided by a court, is in principle capable of being adjudicated and resolved by arbitration unless the jurisdiction of the arbitral tribunals is excluded either expressly or by necessary implication”.

b) The court also observed “In the event that a person entitled to seek an additional special remedy provided under the statutes does not opt for the additional/special remedy and he is a party to an arbitration agreement, there is no inhibition in disputes being proceeded in arbitration.

So after analyzing the above-mentioned provisions, it can be said that Consumer disputes arising out of an agreement with an arbitration clause can be referred to arbitration. Hence, Medical negligence cases giving rise to civil liability under the Consumer Protection Act are arbitrable. Since there hasn’t been much arbitration in the field of medical negligence cases in India, let’s understand what India can learn from the USA in relation to arbitration in medical negligence cases.

Arbitration in the USA in the area of medical negligence cases and lessons for India

Today the health care providers and insurers in the USA are opting for Alternative Dispute Resolution especially mediation and arbitration as they are an effective tool to address the ever-increasing legal costs. So by adopting these processes, the providers and insurers consent that in case any future dispute arises we shall resolve it by the given process. Now let us understand different models of ADR in the healthcare industry.

Different models of ADR adopted by the USA in the healthcare industry

1) The University of Michigan Model

In 2001 The University of Michigan Health System adopted this policy. This model revolves around the idea of fair compensation when the medical expenses are quite unreasonable and lead to a patient’s injury. This model majorly emphasizes the concept of learning from one’s mistakes and the experiences of the patient. The model also provides for open discussion of the error caused by the medical staff. The policy of disclosure has been a great success and has been successful in reducing the average cost per case from USD 48,000 to USD 21,000.

2) The Veteran Affairs Model 

The department of veteran affairs instituted this model. The policy here was a full disclosure agreement, which was of quite an essence to the model.

This included complete disclosure of all the facts related to the error and all necessary and possible actions taken to mitigate it. The very essence of this model is that the chief of staff apologizes in the disclosure and accepts the responsibility for the adverse event. When it comes to compensation, the model provides for monetary awards, corrective medical or surgical actions. From 1987 to 2003, out of 170 settlements, only 3 of them resulted in trials. This shows the efficiency of the model and it is the main reason why it is chosen over traditional litigation.

Arbitration, mediation, negotiation, early disclosure, and apology programs are the various forms of ADR that have been quite successfully implemented in the healthcare industry. However, today we can see that trends are changing and the success of the above models and various other models has been quite promising. ADR today promotes patient safety and reduces the cost. ADR in the healthcare industry, especially in the area of medical negligence cases promises a great future ahead. India today lags behind when it comes to arbitration in medical negligence cases. What India can learn from the US is that it can adopt various models that have been a great success there. Incorporating these models or creating new models, which promote arbitration in the avenue of health care especially medical negligence cases, could be a great breakthrough for India.

Conclusion

It can be concluded that the role of arbitration in medical negligence cases in India is quite minimal and must grow in order to reap the benefits of arbitration.  Various ADR models adopted by the USA such as The University of Michigan Model which revolves around the idea of fair compensation and the Veteran Affairs Model, the very essence of which is that the chief of staff apologizes in the disclosure and accepts the responsibility for the adverse event and the policy adopted in this model is that of a full disclosure agreement, must be adopted by India and thorough research must be conducted in order to incorporate these models smoothly and swiftly. Effective implementation of the above models and a positive approach towards arbitration in the sphere of medical negligence cases will help India in strengthening the role of arbitration in medical negligence cases.

References

1. https://www.jurist.org/commentary/2020/05/yug-sinha-healthcare-arbitration/
2. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3405434
3. https://ssrana.in/articles/medical-negligence-india/?utm_source=Mondaq&utm_medium=syndication&utm_campaign=LinkedIn-integration.
4. https://www.mondaq.com/india/dodd-frank-consumer-protection-act/1062944/medical-negligence-india
5. https://indiankanoon.org/doc/35346928/
6. https://main.sci.gov.in/supremecourt/2018/26696/26696_2018_Judgement_10-Dec-2018.pdf.

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