Disruptive Physician Behaviour and Hospital Liability in Tort: Rosenhek v. Windsor Regional Hospital

Transcription

1 Disruptive Physician Behaviour and Hospital Liability in Tort: Rosenhek v. Windsor Regional Hospital Shantona Chaudhury Pape Barristers Professional Corporation In a January 2010 decision, Rosenhek v. Windsor Regional Hospital, 2010 ONCA 13 ( Rosenhek ), the Ontario Court of Appeal upheld a trial decision awarding over 3 million dollars to a physician whose hospital privileges had been revoked in bad faith. 1 The Court held that hospitals have a duty to exercise their power to revoke privileges with regard to the public interest and in good faith. Exercising this power in bad faith will ground a claim for the tort of misfeasance in a public office. In Dr. Rosenhek s case, the Ontario Hospital Appeal Board (OHAB) found that the hospital revoked his privileges based on nothing more than alleged interpersonal problems, i.e. because he didn t fit in. OHAB reinstated his privileges. Dr. Rosenhek then commenced a civil action for lost income. First the trial court, then the Court of Appeal, found that the hospital had acted in bad faith and awarded damages accordingly. Prior to Rosenhek, a hospital that improperly exercised its revocation power might have expected its decision to be overturned on review or appeal, but would not have expected to face civil liability consequences. As a result of the Rosenhek decision, hospitals (in Ontario, at least) can now expect not only administrative and/or judicial review of their revocation decisions, but if the circumstances warrant, a lawsuit. The post-script to the Rosenhek case is that after his reinstatement, Dr. Rosenhek faced privilege revocation proceedings a second time, with very different results. Having learned from its mistakes, the hospital acted with far more circumspection in Round Two, and its decision was 1 Rosenhek v. Windsor Regional Hospital, 2010 ONCA 13, aff g [2007] O.J. No ; leave to appeal to the Supreme Court of Canada refused, [2010] S.C.C.A. No. 89 (October 21, 2010) ( Rosenhek ) 1

2 upheld by the Health Professions Appeal Review Board (HPARB) in A comparison of the two cases may prove instructive for hospitals seeking to avoid the avenue of liability paved by Rosenhek. The legal innovation and implications of the Rosenhek decision Although Rosenhek was not the first decision in Canada awarding damages to a doctor whose privileges had been wrongfully revoked, it was the first to recognize that this conduct can constitute misfeasance in a public office. Previous decisions awarding damages to physicians in similar circumstances were a) few and far between, and b) somewhat ambiguous as to the cause of action being pleaded. At trial, Dr. Rosenhek successfully relied on an Alberta Court of Appeal case dating back to 1978: Abouna v. Foothills Provincial General Hospital Board. 3 In that case, the court concluded that the wrongful revocation of a physician s privileges constituted infringement of a legal right from which damages could flow. The Abouna case, meanwhile, relied on a 1975 Supreme Court decision, Pilotte v. Bellechasse Hospital Corp, in which the court held that the revocation of a doctor s appointment was not done in accordance with hospital regulations, and that this breach automatically gives rise to a remedy [ ] at least an award of damages. 4 While these decisions came to the same result as Rosenhek, neither of them elucidated the legal basis for liability, or cause of action, in these circumstances. As such, they did not set much of a precedent. 2 Rosenhek v. Windsor Regional Hospital, 2009 CanLII (ON HSARB) ( Rosenhek 2 ). It is important to note that leave to appeal this decision was sought, but denied because the application was brought out of time. Other than in the context of this motion for extension of time, there has been no judicial consideration of the HPARB decision. 3 Abouna v. Foothills Provincial General Hospital Board, [1978] A.J. No. 964, paras Hôpital Bellechasse v. Pilotte, [1975] 2 S.C.R. 454 at pp

3 Not so with Rosenhek, in which the Ontario Court of Appeal put an end to the uncertainty by holding that if a hospital revokes privileges in bad faith, it will be liable for the tort of misfeasance in a public office. Misfeasance is a tort that can be brought for intentional acts of wrongdoing by public officials that have harmed the economic or other interests of private persons: 5 the iconic example is Roncarelli v. Duplessis, 6 in which former Premier and Attorney General of Quebec, Maurice Duplessis, was found liable for misfeasance after wrongfully ordering the cancellation of an individual s liquor license. Misfeasance is made out when there is: (i) deliberate unlawful conduct in the exercise of public functions; and (ii) awareness that the conduct is unlawful and likely to injure the plaintiff. Alongside deliberate unlawful conduct and the requisite knowledge, a plaintiff must also prove the other requirements common to all torts. More specifically, the plaintiff must prove that the tortious conduct was the legal cause of his or her injuries, and that the injuries suffered are compensable in tort law. Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R. 263 As Rosenhek demonstrates, the definition of public office is wide, encompassing not only government officials, but those who are empowered to act by statute and charged with doing so in the public interest. The Court held that a hospital s power to revoke privileges must be exercised having regard to the public interest. It is a statutory, public power, and its bad faith exercise can therefore give rise to a claim for misfeasance: [21] We are satisfied that a bad faith exercise of a statutory, public power can, in law, provide a basis for a tort claim by Dr. Rosenhek against the hospital: see Harris v. The Law Society of Alberta, [1936] S.C.R. 88; Brown v. Waterloo Regional Board of Commissioners of Police (1983), 43 O.R. (2d) 113 (C.A.), at pp ; Odhavji Estate v. Woodhouse, 2003 SCC 69 (CanLII), [2003] 3 S.C.R. 263, at paras ; Freeman-Maloy v. Marsden 2006 CanLII 9693 (ON C.A.), (2006), 79 O.R. (3d) 401 (C.A.), leave to appeal to S.C.C. refused, [2006] 2 S.C.R. ix; Roncarelli v. Duplessis, 1959 CanLII 50 (S.C.C.), [1959] S.C.R The Board s power to revoke Dr. Rosenhek s privileges is found in s. 33(c) of the Public Hospitals Act. That power, in turn, is part of a comprehensive statutory scheme governing the operations of public hospitals. Hospitals are funded largely through the public purse. A purposive reading of the statutory provisions relating to the power to revoke privileges demonstrates that it is exercised having regard to various publicinterest factors relating to, in particular, the quality of care provided by the hospital. Having 5 L.N. Klar, Tort Law, 4 th ed., 2008 Thomson Canada Ltd., p Roncarelli v. Duplessis, [1959] S.C.R

4 regard to these features, we think that the exercise of the revocation power is properly characterized as public in nature. [ ] [36] The Board, in bad faith, exercised its decision-making function for an ulterior purpose and not for the public good, in circumstances where it had to know that its conduct would likely injure the plaintiff. We are satisfied that the tort of misfeasance in a public office was made out: see Odhavji Estate, at paras ; Three Rivers District Council v. Bank of England (No. 3), [2000] 2 W.L.R (H.L.), at p We would not disturb the trial judge s finding that the Hospital is liable to Dr. Rosenhek. 7 This is a precedent-setting decision with important practical implications for hospitals, physicians, and the health law bar. Physicians who feel that their privileges have been wrongfully revoked now have a clear path to a civil lawsuit: in essence, Rosenhek recognized a cause of action analogous to wrongful dismissal for aggrieved physicians. Since revocation can significantly impede a physician s ability to practice elsewhere, and since physician incomes tend to be high, the damages sought in these actions are likely to be considerable. Although the Rosenhek decision dealt only with revocation of privileges, it is reasonable to assume that decisions regarding staff appointments, re-appointments, suspensions, etc. will be subject to the same legal standard. And although the Rosenhek decision applies in Ontario only, it will almost certainly be used as persuasive authority by plaintiffs lawyers in other provinces. The hospital s conduct in Rosenhek: what not to do when faced with possible disruptive physician behaviour The facts in Rosenhek can be considered an example for hospitals of what not to do when faced with allegedly disruptive physician behaviour. 7 Dr. Rosenhek also based his claim on the tort of intentional interference with economic relations, whose elements are: i) intent to injure; 2) interference with the plaintiff s business by illegal or unlawful means; 3) economic loss. Although the trial judge found that the hospital had acted unlawfully, this decision was based on the erroneous assumption that the hospital had breached certain statutory provisions which did not actually apply to this case. The Court of Appeal noted this error and based its decision on the tort of misfeasance rather than the tort of interference with economic relations (see Rosenhek, para. 19, footnote 2) 4

5 Dr. Rosenhek had a history of interpersonal difficulties with certain colleagues and members of the hospital administration. On March 23, 1989, Dr. Rosenhek was seeing patients at the hospital when he was summoned to the office of the executive director. The executive director handed him a letter which informed him that on recommendation of the Medical Advisory Committee (MAC), the Board of Governors had decided to revoke his privileges, effective immediately, pursuant to s. 33 of the Public Hospitals Act. The letter informed Dr. Rosenhek that he was entitled, upon request, to written reasons for the decision and to further hearing before (OHAB). Dr. Rosenhek was immediately escorted out of the building. Needless to say, Dr. Rosenhek availed himself of the further hearing. In 1994, OHAB found that Dr. Rosenhek had been denied procedural fairness, or what lawyers often refer to as natural justice. Specifically, OHAB found that: Dr. Rosenhek was never given Notice of the MAC meeting; Dr. Rosenhek was never given Notice of the MAC s recommendations to revoke his privileges; Dr. Rosenhek was not given an opportunity to appear before the Board of Governors when they revoked his privileges; Dr. Rosenhek was given no opportunity to respond to the MAC s recommendations; The written reasons Dr. Rosenhek ultimately received did not cite any recent acts or omissions consistent with past criticisms; The allegations against Dr. Rosenhek involved interpersonal relationships and a personality problem. OHAB therefore granted Dr. Rosenhek a hearing de novo. In its 1996 decision pursuant to this hearing, OHAB found that hospital administrators had revoked Dr. Rosenhek s privileges because they didn t like him and he didn t fit in. Rather than attempt to resolve whatever interpersonal conflicts existed, the hospital simply ousted him. OHAB set aside the revocation and reinstated Dr. Rosenhek s privileges, finding: This Board must, in the end, ask itself whether, in all the circumstances, the decision of the Hospital's Board of Governors to revoke Dr. Rosenhek's privileges was soundly based. On all the evidence, we have concluded that it was not. 5

6 It is clear from the evidence, indeed, from the Hospital's own evidence, that there is no question as to Dr. Rosenhek's professional competence. It is equally clear that the revocation of his privileges cannot be justified by any reasonable concern over the quality of his patient care. In the end, the Hospital's case comes down to the allegation that Dr. Rosenhek just did not fit in. But a hospital is not a fraternity, and fraternity notions of "fitting in" do not apply. The fact is that Dr. Rosenhek walked into a hornet's nest, not of his own making, in the form of the Critical Care Unit initiative. The very purpose of his recruitment by the Hospital left him on what turned out to be the losing side of the controversy. It is probably the case that he displayed a degree of arrogance in respect of his training and skills that exacerbated the situation. We say "probably" because it was a much-chastened Dr. Rosenhek whom we saw at the hearing, chastened by the havoc which revocation of his privileges has wreaked on what should have been, and hopefully will yet be, a brilliant career. There can be little doubt that the lack of coverage faced by Dr. Rosenhek and the Hospital's utter failure to take any steps, other than lip service, to assist in the resolution of that problem, further exacerbated this situation. All that having been said, however, whatever the contributing factors to the alleged interpersonal problems may have been, the overwhelming weight of the evidence indicates that the problems were minor and certainly not such as to justify the extreme measure of revocation of privileges. When we are examining the question of "fitting in", this Board must take very seriously the testimony of the twelve nurses, eight physicians, seven patients and family members of patients and two medical secretaries, all of whom sang Dr. Rosenhek's praises. To be sure, hearings are not won or lost by counting the witnesses on each side. But against the evidence called by Dr. Rosenhek, the only first-hand evidence we have of his alleged inability to work within the Hospital structure, to work with professional colleagues and staff is that of Dr. Mandal. We find his evidence unconvincing. Dr. Rosenhek brought a civil suit in the Superior Court, seeking to recover lost income for the years during which he was unable to obtain privileges at any hospital due to the black mark of the revocation on his College of Physicians and Surgeons of Ontario (CPSO) record. The OHAB findings proved to be damning: although OHAB did not use the words bad faith, the trial judge had no difficulty in holding that the hospital s conduct, as described by OHAB, amounted not only to a denial of natural justice but to bad faith. The trial judge awarded Dr. Rosenhek approximately $3 million, plus interest, in damages. As previously discussed, the Court of Appeal upheld this decision and clarified the legal basis for it. The Court of Appeal emphasized that three factors in particular indicated that the hospital was acting in bad faith. First, the reasons cited by the hospital for revoking Dr. Rosenhek s privileges were devoid of merit, as indicated by the OHAB findings quoted above. As Doherty J.A. wrote, [w]hile a wrong decision, even a very wrong decision cannot be equated to a decision made in bad faith, a 6

7 decision may be so clearly wrong on the merits as to provide some evidentiary support for a finding of bad faith. We place this decision to revoke Dr. Rosenhek s privileges in this category. 8 Second, the timing and manner of the revocation demonstrated the hospital s bad faith: Dr. Rosenhek s privileges were revoked mid-term, two months after they had been renewed and a month before they were set to expire. There was no evidence that anything had changed between the time of renewal and the time of revocation. The manner of the revocation also evinced the hospital s bad faith: Dr. Rosenhek s privileges were terminated effective immediately and he was essentially frog-marched out of the building, for no good reason. Third, the Hospital s motive in revoking Dr. Rosenhek s privileges getting rid of a doctor who didn t fit in -- was improper. Rosenhek, Round Two: the hospital wises up In 2008, twelve years after Dr. Rosenhek s privileges had been reinstated, the hospital once again decided to oust him. This time, however, the hospital administration conducted itself quite differently. First, the hospital took care to dot the i s and cross the t s of procedural fairness. When Dr. Rosenhek re-applied for privileges for the year, he was notified that the MAC would be holding a special meeting on the issue, and was permitted to attend with counsel and to make oral and written submissions. The MAC nevertheless recommended to the Hospital Board that Dr. Rosenhek s application be denied. After a six day hearing, the Hospital Board refused Dr. Rosenhek s re-appointment, and further directed that patient and staff safety required that Dr. Rosenhek s privileges be revoked immediately. Dr. Rosenhek appealed to HPARB, which ultimately confirmed the Board s disposition in 30-page written reasons. 8 Rosenhek, para. 29 7

8 Second, the hospital was careful to frame its case in terms of concern for patient safety. In a 2004 case, Soremekun v. University Health Network, 9 the Ontario Divisional Court held that the test for the reasonableness of a decision to suspend a physician s privileges was whether the decision was based on a valid concern for patient safety. Patient safety is, understandably, accepted as a legitimate reason to revoke hospital privileges. Thus, although the underlying complaint in Rosenhek 2 still centred on the interpersonal difficulties which had been prominently featured and soundly rejected in Round One, the hospital now argued that these interpersonal difficulties had the effect of compromising patient safety. Rather than this being a matter of Dr. Rosenhek not fitting in, it became a matter of Dr. Rosenhek posing a threat to the quality of patient care. Although HPARB did not find that there was any problem with Dr. Rosenhek s competence or the quality of care he provided, it did hold that: physician conduct and behaviour are directly related to patient safety and a hospital s ability to effectively manage quality of care. Disruptive physician behaviour has repeatedly been found to affect a physician s hospital privileges and even constitute a ground for revocation of privileges. (See for example, Cooper v. Hospital Privileges Appeal Board, 1999 ABQB 165) By making the link to patient safety, the hospital shielded itself from the accusation that its administrators were acting like a frat house clique in turfing a doctor they did not like, and even assumed the all-important moral high ground. Although the HPARB decision has not been judicially considered other than in a motion for an extension of time for leave to appeal, and although there is some question as to whether the supposed compromise in patient care was sufficient to warrant immediate privilege revocation, it is evident that the hospital s conduct in Round Two was markedly more fool-proof than its conduct in Round One. Conclusion: the take-away message of the Rosenhek decisions 9 Soremekun v. University Health Network, 2004 CanLII (ON SCDC) 8

9 Caveat, nosocomium: the Ontario Court of Appeal has made it clear that a bad faith decision to revoke a physician s hospital privileges will give rise to a claim in civil liability. The lesson from Rosenhek is that a decision to revoke privileges must be both procedurally and substantively fair. Hospital administrators must recognize that they exercise their powers in the public interest; they cannot exercise these powers arbitrarily or with regard to purely private interests. That said, the lesson from Rosenhek 2 may well be that the link between revocation and the public interest is not a particularly hard one to draw. 9