Indemnity and beyond
UK Government Consultation on Indemnity – a view from Helen Kaney, Lead Dento-legal Consultant and Head of Dental Services, Scotland, Dental Protection
The UK Government has finished consulting on proposals that would reform how general dental practitioners and other healthcare professionals purchase their indemnity1.
This consultation was launched just before the state-backed indemnity scheme began for medical GPs in England and Wales for clinical negligence claims that relate to their NHS contracted work. A state-backed indemnity scheme for UK dentists, however, seems very unlikely and would be very challenging given that many patients will receive private and NHS treatment from their dentist and often during the same course of treatment.
It is therefore unlikely that a state-backed scheme would be introduced given the complexity of managing this scenario. UK dentists will therefore continue to arrange their own indemnity cover for the foreseeable future.
So, what do dentists need to know and what are the factors that dentists need to take into account in their indemnity decision-making?
The first is to check whether the protection provided is claims-made or occurrence-based? The second is to establish whether the provider is a discretionary mutual organisation or an insurance company?
Occurrence-based vs claims-made cover
Most clinical indemnity cover over the last 100 years in the UK has been provided by three main medical and dental defence organisations. In the last few years, however, there has been a rise in the number of insurers that have started to offer indemnity insurance in the UK market. Much has been written over the years about all of these issues and
a recent BDJ article2 covered these points.
The key difference between occurrence-based and claims-made protection is in relation to how the protection is structured. It is important to understand that claims are rarely made immediately after an adverse incident or course of treatment occurs. It is well known that cases in dentistry, and clinical negligence claims in particular, can have a very long “tail”, which means that it can take several years from the moment the incident happened or course of treatment was provided until a complaint or claim arises.
Dental Protection statistics indicate that only 14 per cent of claims are reported in the same year that the incident occurred. When a clinician is protected by occurrence-based indemnity, that clinician can be assured that if they leave clinical practice for any reason they have indemnity in place for all incidents arising out of that clinical practice, no matter when a case relating to that incident, whether it be a complaint, claim or regulatory matter, comes to light.
Occurrence-based indemnity is considered to be the ‘gold standard’. Practitioners often value the long-term peace of mind that it offers, because they do not need to make any further financial arrangements if they leave membership of their provider or cease practice in order to protect them for the future. Although the cost of claims-made protection is often lower in the first few years than it is for an occurrence-based protection, there can be additional costs incurred on ending the policy (such as at retirement, if the clinician ceases practise or if they switch to another indemnity provider).
When all additional costs are considered, the overall cost for both claims-made and occurrence-based protection is likely to be broadly similar over the course of a clinician’s career. There is a need with claims-made insurance that “incidents” are reported within specific time frames, but what constitutes an “incident” can be open to interpretation in dental claims. Recent member research by Dental Protection showed that the requirement to report incidents for claims made policies was of particular concern.
Discretionary indemnity vs insurance
Much has been written over the years about discretionary indemnity and concerns about the value of such indemnity are regularly raised in several platforms, including on social media. There appears to be a belief that discretionary assistance can be withdrawn on a whim, which is absolutely not the case in my experience. In fact, discretionary indemnifiers must follow the law around how discretion is exercised, to ensure that it is fair and consistent and not arbitrary, capricious or irrational. Medical and dental defence organisations are also governed by their Articles of Association, which form a contract between the defence organisation and the member. If the articles are breached, members have recourse to the courts3.
Proponents of discretionary indemnity cite its flexibility as a positive aspect, in that it can allow the provider to respond to changes in the dentolegal environment and assist members with emerging risks that may not have been foreseen at the time membership was taken out.
Decisions to assist members are made every day. In situations where the analysis of the case and the member reveals a potential issue, the matter is considered extremely carefully to assess whether assistance can be provided.
There also appears to be a belief that assistance can be withdrawn mid-case, unjustifiably. In my experience, this would only occur if, for whatever reason, the member had decided not to co-operate with their defence team. Legal teams require instructions and cooperation from the member and when this isn’t happening, the member is advised that if they are unable to work cohesively with their defence team, assistance may be withdrawn. Such situations are rare, but when they do occur, the member is given several chances to consider the implications of disengaging with their defence organisation. Some individuals then elect to deal with the matter themselves. It is also important to be aware that not all indemnity providers assist with personal conduct matters before the regulator, which is why some individuals are unrepresented at the GDC.
Both discretionary indemnity and insurance policies have their pros and cons. A contract of insurance brings a certain level of contractual certainty that assistance will be provided as long as the claim being made, i.e. the assistance being requested by the insured individual, falls within the contractual terms of the policy. But precisely one of the benefits of discretionary indemnity is that it is not bound by policy wording. Discretion can be exercised to widen the scope of the assistance usually provided for the benefit of the individual or the profession as a whole, which means that discretionary indemnity is usually considered to be more flexible.
It is very important to fully understand what has been purchased, whether it is discretionary or insurance-based cover and whether it is claims made or occurrence based. Policies provided by commercial insurers have differing caps and exclusions, so it is vital to understand what has been purchased and what the policy covers. It is also important to be aware that medical and dental defence organisations are “not for profit” member-owned organisations and do not need to charge insurance premium tax.
UK Government Consultation and what happens next?
The three main UK medical defence organisations (MDOs) have now all responded formally to the Government’s consultation. All indicate that there is little evidence that patients are unable to access appropriate compensation and explain that requiring dentists to hold insurance will mean that dentists have to pay extra costs to protect themselves from claims, including insurance premium tax of 12 per cent and other costs of regulation.
Discretionary indemnity continues to be the principle that underpins how compensation is made available in the UK, not just by the MDOs – but by the new state-backed scheme for GPs, the scheme run for NHS Trusts and also the indemnity provided to nurses by the RCN. There is very little evidence or concern regarding the current arrangements.
The unintended consequences of requiring all dentists to hold an insurance product need to be properly considered if the Government proceeds with these proposals, and the types of insurance available considered and recommendations made regarding what would be considered to be an acceptable form to ensure protection of both the patient and the clinician. Dental Protection is very aware of the number of dentists who appear before the GDC without any support or assistance from their indemnity provider, which is certainly not in the interests of those individuals or even the profession as a whole. Whilst it seems likely that the Government will proceed with the reform of how indemnity in the UK is regulated, another option is to require a mandatory Code of Conduct for the discretionary providers. Among other measures, this could establish an independent complaints process to adjudicate on member complaints.
The final decision of the UK Government remains to be seen, i.e. whether that is to maintain the status quo or to dictate that all clinicians without a state-backed indemnity scheme need to hold regulated cover. Time will tell.
Mind the Gap L. D’Cruz British Dental Journal Volume 225 No. 10 November 23 2018
About the author
Helen Kaney BDS LLB Dip LP MBA FFGDP (UK) FFFLM
Lead Dento-legal Consultant and Head of Dental Services, Scotland, Dental Protection.
Helen spent many years in general dental practice before training as a solicitor and working for law firms that acted for commercial insurers and the UK indemnity organisations, acting for both doctors and dentists in various situations including clinical negligence claims and regulatory matters.
She also worked as a dentolegal adviser for a commercial insurer which provided claims-made insurance for clinicians. Helen has worked for Dental Protection for the last 10 years where she is a Lead Dento-legal Consultant and Head of Dental Services, Scotland and advises and assists Dental Protection members throughout the UK and internationally.