Hospital exemption clauses: Enforceable or not?

You have been the unfortunate victim of the negligence of a hospital employee. As a result, you have suffered personal injury and are now faced with major future medical bills. You approach the hospital with your claim, only to be made aware that you have signed an exemption of liability clause which indemnifies the hospital in the event of injury or death, including arising from negligence. You realise that all those documents and admission forms that you blindly signed upon arrival, contains a clause that indemnifies the hospital, its employees and agents of all liability for any claim for damages or loss that is caused directly or indirectly.

What does the signing of this clause mean? Is the clause valid and enforceable? Can you not under any circumstances institute a valid claim against the hospital?

Until recently, the answers to these questions were not in favour of the health care user. A decade ago our Supreme Court of Appeal held that these clauses were fully enforceable, often leaving the health care user in a very unfortunate position. Health care users often do not read or comprehend the fine print and those that do note the exemption clauses, may on occasion find themselves in an uneven bargaining position where they have no choice but to accept the clause. Exemption clauses were held only to be unenforceable in cases of proven gross negligence.

However, with the enactment of the Consumer Protection Act, a potential new avenue of relief has been created for health care users as the Act requires a fresh look at some of the unreasonable consequences of these blanket exemption clauses.

The Consumer Protection Act states that a supplier (in this context, the hospital) may not require a consumer (the patient) to:

  • waive any rights;
  • assume any obligations; or
  • waive any liability of the supplier

on terms that are unfair, unreasonable or unjust, or impose any such terms as a condition of entering into a transaction.

Furthermore, the Act prohibits a supplier to make a transaction or agreement subject to any term or condition if it directly or indirectly purports to avoid a supplier’s obligation or duty in terms of the Act. The Act places a duty on the supplier to perform services in a manner and quality that persons are generally entitled to expect.

This means that the hospital cannot require you to waive liability or your rights in circumstances where such waiver would be unfair, unreasonable or unjust. The Act goes further to describe when an agreement, term or condition (such as an exemption clause) would be unfair, unreasonable or unjust.

This will be the case if –

  • It is excessively one-sided in favour of any person other than the consumer;
  • The terms of the transaction or agreement are so adverse to the consumer as to be inequitable;
  • The consumer relied upon a false, misleading or deceptive representation or a statement of opinion provided by or on behalf of the supplier, to the detriment of the consumer;  or
  • The transaction or agreement was subject to a notice, term or condition, and –
    • The term, condition or notice is unfair, unreasonable, unjust or unconscionable; or
    • The fact, nature and effect of that term, condition or notice was not drawn to the attention of the consumer in a manner that satisfied the applicable requirements.

In our scenario, the clause in the agreement that you signed could be prohibited or declared invalid in terms of the Consumer Protection Act, provided the above conditions are met. The court has the power to declare such a clause unconscionable, unjust, unreasonable or unfair and may further make an order to compensate the consumer for losses or expenses.

The Act also requires that all clauses such as exemption clauses be written in plain and understandable language and the supplier is obliged to draw your attention to such clause before you sign it, as well as give you an adequate opportunity to receive and comprehend the provision.

The Act does not prohibit the use of exemption clauses and such clauses will still be encountered and be enforceable in everyday life. However, the Consumer Protection Act now regulates the use of these clauses and restricts their blanket application and the protection they afford by requiring these clauses to be reasonable under the circumstances.

Accordingly, if you have suffered injury due to the negligence of health care providers, consult with your attorney as soon as possible to assist you with the following:

  • Obtain copies of your medical records by way of prescribed procedure for access to information.
  • Determine whether an exemption clauses was signed, and if so, whether the exemption clause was correctly pointed out, and whether the clause in itself is unfair, unreasonable or unjust.
  • In the event of the clause potentially being unfair, unreasonable or unjust, to advise you on the merits of pursuing a claim for injury or damages.

Make sure that you seek legal advice as soon as possible and remember that the date of the incident is very important. A claim must under normal circumstances be instituted within three years. However, as the effects of your injury may only be discovered at a much later stage, the three year period can in certain circumstances be extended. Additionally, the Consumer Protection Act in certain instances does not apply retrospectively and if the contract was signed before 1 April 2011, the exemption clause might still be enforceable. Finally, bear in mind that even after the exemption clause has been declared invalid, the negligence of the health care provider must be proven to succeed with a successful claim, and the advice of your legal professional as to the merits of your case will be important to determine whether you have a valid claim.

June 25, 2013

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