Private Hospitals Also Liable For Medical Negligence (Part IV): Implications

Dr Milton Lum lists implications of the Federal Court ruling in Siow Ching Yee v Columbia Asia, including reviewing the relationship between private hospitals and doctors when adverse events occur. “Throwing doctors under the bus should not be an option.”

This article is a continuation of these articles: Private Hospitals Also Liable For Medical Negligence: Federal Court Ruling Analysis (Part I), Private Hospitals Also Liable For Medical Negligence (Part II): Non-Delegable Duty Of Care In Common Law, and Private Hospitals Also Liable For Medical Negligence (Part III): Statutory Framework Of Duty Of Care

Questions Posed And Decisions Of Federal Court

To recap, seven questions of law were posed to the Federal Court (FC), i.e.

  1. Whether the owner and manager of a hospital is in law a provider of health care and owes a non-delegable duty of care to patients as stated by the English Court of Appeal in the post Dr Kok Choong Seng & Anor v Soo Cheng Lin & Another Appeal [2018] 1 MLJ 685 case of Hughes v Rattan [2022] EWCA Civ 107? 
  2. Whether the judgement of the Federal Court in Dr Kok Choong Seng regarding the tort of negligence in a private hospital applies where the owner and manager of the hospital owes separately duties of care in contract and by statute?
  3. Whether the owner and manager of a private hospital is liable to patients under a non-delegable duty of care when a doctor practising in the hospital as an independent contractor has insufficient professional indemnity for malpractice?
  4. If the answer is yes, whether the owner and manager, as a provider of health care, may escape liability for a breach of such duty of care committed by a doctor because the doctor is an independent contractor who has been engaged to practise in the hospital? 
  5. Whether there is a statutory duty of care, independent of a duty in negligence or contract, owed by the owner and manager of a private hospital under the Private Healthcare Facilities and Services Act 1998 and the subsidiary legislation made thereunder?
  6. Whether the fees received by a director of a company from the company are ‘earnings by his own labour or other gainful activity’ under s 28A(2)(c)(i) of the Civil Law Act 1956? 
  7. In light of the post Dr Kok Choong Seng case of Armes v Nottinghamshire Country Council [2018] 1 All ER 1 decided by the Supreme Court of the United Kingdom, whether after applying the 5-feature test in Woodland v Essex County Council [2014] 1 All ER 482, a Court must additionally apply the test of whether it is fair, just and reasonable to impose a non-delegable duty of care in the circumstances of the case?

The majority of the FC coram did not address the above questions specifically but generally in the grounds of judgement. The dissenting judge declined to answer questions 1-4 and 6; and with the answers negative to question 5; and affirmative to question 7.

It could be observed that in the majority judgement:

  1. Question 1 was answered in the affirmative. 
  2. Question 2 was answered partly in the negative in that the FC decided that there was a statutory non-delegable duty of care imposed upon the private hospital (a point which was not raised and was not addressed in Dr Kok Choong Seng);
  3. Question 3, and consequently question 4, was not discussed or answered. 
  4. Question 5 was answered in the affirmative i.e. there is a statutory duty of care, independent of a duty in negligence or contract, owed by the owner and manager of a private hospital under the Private Healthcare Facilities and Services Act 1998 and the subsidiary legislation 
  5. Question 6 was answered in the affirmative.
  6. Question 7 was answered in the negative i.e. in favour of appellant Z.

The FC determined that:

[86] With all five (Woodland) features satisfied, it is clear that the respondent has assumed a non-delegable duty of care that it owes personally to the appellant, a patient that is admitted to its emergency services. The defence of independent contractor thus is not sustainable in law and on the facts and ought to have been rejected by the Courts below. (emphasis added)

With regard to indemnity from Dr N, the FC ruled:

[94] Finally, a note on indemnity. The respondent has invited this Court to order that the second defendant indemnify the respondent in the event that it is found liable. I do not find this to be right or available in law.

[95] First, the 2nd defendant is not a party to this appeal. More importantly, it flies in the face of the earlier findings that the respondent owes a non-delegable duty of care and it remains liable regardless to whom it may have employed or engaged to carry out that duty of care. The principle imposes a personal liability on the respondent, over and above that against the tortfeasor (emphasis added).

Implications Of Federal Court Decision

There are monumental implications of the FC’s decision for patients; private hospitals and specialists practising in these hospitals; and general practitioners also.

The principles in this case will affect both emergency and non-emergency medical negligence cases. Whilst he duty of care shall remain, the expected standard of care would have to be im accordance to the circumstances of a case.

In Siow Ching Yee v Columbia Asia Sdn Bhd [2014], the hospital accepted the emergency case and was entitled by the PHFSA and did charge fees, including on behalf of the attending doctors, for the services provided to appellant Z.

In short, the FC decision in this case was good news for patients and most doctors in private hospitals, irrespective of whether they have a contract of service (“employed”) or contract for service (so-called “independent contractors”).

Private Hospitals

Private hospitals would, quite naturally, be unhappy with the FC’s decision, in the short-term. However, the private hospitals that work towards the goals of safe and quality health care by putting the patient at the centre of care, would benefit, in the middle- to long-term. 

The owners and managements of private hospitals would have to carry out an immediate assessment of their expected risk of exposure to medical negligence claims and increase their indemnity coverage accordingly. 

Private hospitals would have to institute measures to minimise the risks of medical negligence claims. There are many measures that can be taken, some of which are discussed below.

The private hospitals’ credentialing (i.e. verification of qualifications) and privileging (i.e. authorisation of scope of practice for patient case based on credentials) processes would have to be strengthened with more robust evaluations of the calibre and experience of the specialists permitted to practise.

Prudence would have to be exercised in taking on newly minted specialists some of whom may be still wet behind their ears.

The owners of private hospitals would have to evaluate the performance of the licensee, persons-in-charge, and administrators more robustly.

The evaluation cannot be just solely on profits. If they do so, it is probable that it would impact negatively on the middle- to long-term financial prospects of the hospital.

An immediate measure to minimise negligence would include scrutiny of the doctors’ practices with audits, reviews, quality improvement initiatives etc. The performance measurement of the doctors would have to move away from the financial contributions to the hospitals’ income.

A set of performance measurement measures based on clinical processes, outcomes and balance would have to be established. For example, the balance measure for reducing patients’ length of stay would require ensuring that unscheduled returns to the operating theatre and readmission rates are not increasing.

Whilst the majority of patients have safe and effective care, it may be catastrophic for all involved when an adverse event occurs. Global data indicate that most patients expect an open and honest explanation of what went wrong, an apology and an assurance that the problem that occurred is corrected.

Good communication is critical to rebuilding the trust of patients and their family members. Poor or no communication compounds the injury sustained, which can lead to complaints and/or litigation. In my experience, this is an area which is woefully deficient in many hospitals, both public and private, and which can be improved upon markedly with minimal costs provided there is commitment by the owners, administrators and doctors.

The private hospitals would have to review and improve their relationship with their doctors, especially when an adverse event occurs. Throwing doctors under the bus should not be an option – this approach should be thrown into the bin. It is in the interests of both the hospital and their doctors to adopt a more co-operative approach, which would be more productive, than an adversarial one. 

Time will tell whether the current adversarial approach of some hospital administrations continue or there is change to a more co-operative one. If the former approach continues, then, when medical negligence claims are brought against both hospitals and their doctors, there would likely be continued fighting between them about attribution, distribution and contribution with regard to liability. If there is change towards a co-operative approach, there would be savings in time, money, and most importantly, reputation for the hospitals and their doctors.

Private Specialists

Until this case, hospital managements have been passing to their doctors, rather unfairly, the burden of defending or settling medical negligence claims. 

It would be in the interests of specialists to review their risks annually and obtain the appropriate indemnity coverage. Burying the head in the sand is no longer an option. Whilst court awards in medical negligence have not increased markedly in the past decades, the effects of inflation alone will impact on the quantum of court awards. 

Specialists who are already paying large indemnity premiums e.g. obstetricians, plastic surgeons, spinal surgeons should expect a reduction in their premiums since hospitals can also be found liable in medical negligence as they have a non-delegable duty of care.

However, it is advisable for specialists whose indemnity premiums do not reflect their risk exposure e.g. anaesthetists, neonatologists, and emergency specialists to review their risks and ensure that they have coverage appropriate to their risks. 

Inappropriate interventions, especially surgical ones, have consequences that include increased intensive care unit admissions (and consequent larger hospital incomes).

This would, hopefully, be reduced. In any case, some indemnity providers have begun to impose additional surcharges to the premiums of some doctors and with some doctors even reporting that they have encountered difficulties in getting indemnity coverage.

As the law stands by reason of precedence, an employer can seek indemnity from a negligent employee. What about the seeking of indemnity from an “independent contractor”? In Siow Ching Yee v Columbia Asia Sdn Bhd [2014], the FC decided there is no such right. 

It will be interesting to see how the courts decide, in future cases, in which the doctor’s contract with the hospital stipulates that the doctor agrees to indemnify the hospital in the event the hospital is found liable for medical negligence. It is advisable for doctors in such situations to seek legal advice as soon as possible.

The Civil Law Act 1956 contains a provision for contribution from multiple tortfeasors e.g. in road traffic accident cases but the word “indemnity” is absent in the Act. However, it is suggestive that a hospital and an “independent contractor” may see sharing of liability in future medical negligence cases.

There have been claims that the practice of defensive Medicine will increase and that private hospitals will decline to manage “complex” cases with more referrals to the public hospitals consequently. However, the rationale for such claims have not been provided by those who made them. 

The practice of medicine is fraught with uncertainty. Whilst patients expect the perfect outcome, doctors can only work towards the best possible outcome in the circumstance of the individual patient. 

The definition of defensive medicine is at best imprecise. Consider two patients who have the same clinical profile. One patient has the routine investigations for the condition.

The other requests for all the available tests to exclude all possible causes of the condition which the attending doctor does – Is this defensive medicine?

The definition of “complex” cases is also imprecise. Everyone knows that what starts off as a “simple” case may become complex. 

There are various types of private hospitals, with some able to provide tertiary care and others, secondary care only. The former can take in cases of any complexity whilst the latter’s capability is more limited. Specialists practising in private hospitals have to always take cognizance of the hospitals’ capabilities in the provision of care.

Doctors should remember the Malaysian Medical Council’s Code of Professional Conduct statement on the  standard of care: 

“[1]…Apart from a practitioner’s personal responsibility to his patients, practitioners who undertake to manage, or to direct or to perform clinical work for organisations offering private medical services should satisfy themselves that those organisations provide adequate clinical and therapeutic facilities for the services offered.” (emphasis added)

General Practitioners

General practitioners (GPs) who are usually the owners and persons-in-charge of their clinics should take cognisance of the FC’s judgement particularly in regard to the statutory framework of the duty of care.

Like private specialists, GPs would have to review their exposure to medical negligence claims annually and obtain the appropriate indemnity coverage.

Most GPs are unlikely to see an increase in indemnity premiums apart from that due to inflation. However, it is advisable for those in aesthetic medical practice to ensure that their coverage is appropriate to their risks. Patient expectations are high in those who seek aesthetic care and when the results are less than expected, which can occur, it can lead to complaints and/or litigation.

GPs would have to provide appropriate care, to practise with the boundaries of their discipline and to know when to refer to a hospital / specialist. Delays in referral, for whatever reason, may lead to adverse event(s) which can result in complaints and/or litigation.

GPs would have to be more discriminating in appointing doctors to provide locum cover to ensure that the locums clinical skills are appropriate for the GP’s practice. 

Public Sector

The PHFSA does not apply to the public sector in which almost all its doctors are employees. But the public sector facilities concerned will be directly liable in the tort of negligence by reason of a non-delegable duty of care and also vicariously liable for the negligence of their employees. 

In some cases, the public sector facilities may also be liable in contract, in particular, with those who are under a contract for service e.g. Malaysians working part-time in the public sector, foreign doctors providing care and teaching.


Patients who have been awarded damages in medical negligence cases are more than likely to receive the full amount of the court award since private hospitals can also be found liable for medical negligence. 

One of the primary reasons for Siow Ching Yee v Columbia Asia Sdn Bhd [2014] was the fact that Dr N did not have sufficient indemnity coverage for the High Court award let alone the increased award by the Court of Appeal. Incidentally, the FC increased the award to the appellant further.

It has been claimed that the FC decision in this case would lead to increased costs of private health care. However, there was no data provided to support the claim. Everyone knows there are multiple factors in private health care which include costs of drugs, consumables, medical devices, staff salaries, utility costs, dividends for shareholders etc. There is no data on the extent of the contribution of indemnity premiums to health care costs. 

Only time will tell whether the FC’s decision will lead to an increase in health care costs. If private hospitals and their doctors endeavour to reduce or minimize adverse events, and ensure patients get value-based health care, the health care costs would be likely to decline.

If private hospitals view this case as a wake-up call and take the necessary measures to improve further the standards of care, patients would benefit. 


The Association of Private Hospitals of Malaysia and the Consumers Association of Penang appeared in the FC as amicus curiae (Latin for “friend of the court”).

It was regrettable that no medical organization appeared as amicus curiae to present the doctors’ perspective. Yet there have been press statements by some medical organizations after the FC judgement came into the public domain. The members of medical organizations have a legitimate reason to seek an explanation from their leadership why they did not appear as amicus curiae in the FC hearing.

It was also regrettable there were no press statements, to date, on the plight of patients with  medical negligence, realisation of their court awards, and measures to reduce the incidence of adverse events which, if not managed appropriately, could lead to complaints and/or litigation. 


Siow Ching Yee v Columbia Asia Sdn Bhd [2014] reinforces the following, among others:

  • The patient has to be at the centre of health care delivery.
  • Safety and quality have to take precedence over profitability.
  • When things go wrong, the injury has to be rectified.
  • Private hospitals and their doctors are in the same boat.

Medical practice today is complex with errors of commission or omission more likely to arise. Thankfully, most errors do not result in patient harm and are preventable.

Collaboration and communication are critical to the mitigation of preventable errors and improvement of outcomes for all patients. 

Dr Milton Lum is a Past President of the Federation of Private Medical Associations, Malaysia and the Malaysian Medical Association. The views expressed do not represent that of any organisation the writer is or was associated with. No responsibility is assumed by the writer for any injury and/ or damage to persons or property in respect of anything or the consequences of anything done or omitted to be done by anyone in reliance, whether wholly or partial, upon the whole or any part of the contents of this article. If legal advice is required, the services of a legal counsel versed in medical law should be sought.

  • This is the personal opinion of the writer or publication and does not necessarily represent the views of CodeBlue.

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