With no contractual obligation to indemnify, can the lack of regulation for Medical Defence Organisations continue?

With the consultation on the future of medical indemnity now in its sixth year, two news stories that made the headlines brought into focus the lack of regulation for Medical Defence Organisations (MDOs).

The catalyst that didn’t lead to change

The first involves Dr Ian Paterson, currently serving a jail sentence for subjecting over 1,000 patients to unnecessary surgeries over 14 years. A scandal that ruined many lives, for Paterson’s private patients their ordeal has been made far worse because the MDO that provided his indemnity withdrew their support and exercised their discretion.[1]

When Ian Paterson was jailed in 2017, it was the catalyst for the government to start consulting on whether all indemnity should be insurance backed. The traditional MDOs offer discretionary policies, meaning their decision to cover any negligence claims will be just that – discretionary. Even before the Paterson case, in 2009, the then-CEO of the Medical Defence Union (MDU), was pointing out the “serious” scenario of doctors and dentists with no contractual right to indemnity, who may not be covered by their insurance if sued for malpractice and whose patients may fail to be compensated, too.[2]

The “loophole” in UK insurance regulations

Fast-forward to 2023, and we recently learned about the tragedy of the man who took his own life after successfully winning compensation for dental implant work that left him in agony.[3] Although 81-year-old Clive Worthington was awarded £116,000 in damages in a UK court, he didn’t receive a penny. The reason being, the dentist who delivered his treatment was a member of an MDO who exercised their discretion to not provide indemnity. It took 14 long and stressful years for Mr Worthington’s case to come to court, during which time he was in constant pain. An inquest is pending, but the family believe that it was the “devastating loophole” in UK dental insurance regulations that made the “final blow” that contributed to his death.

Dentists and other medical professionals must surely ask themselves, “is discretionary indemnity appropriate and fit for purpose for modern dentistry and medicine?” The answer would appear to be, no. But there are thousands of clinicians in the UK who are still indemnified by non-regulated MDOs – who could decide not to cover them and, furthermore, do not have to give a reason why. Furthermore, and most worryingly of them all, many dentists are unaware of the discretionary nature of their indemnity.

Contract-backed insurance

Choose contract-backed cover and you are choosing to protect your reputation, assets and mental health, in the event of a claim being made against you. And, should the decision be that your patient was treated negligently, and received incorrect and/or inappropriate care, they will be properly compensated. Insurance companies that offer contract-backed cover are regulated by the Financial Conduct Authority (FCA). They are required to treat all clients fairly, and to disclose their full financial position when required. Contractual insurance policy holders are also eligible for compensation via the Financial Services Compensation Scheme, should the insurer be unable to cover the cost of a claim.

The bottom line is, can we accept that patients who successfully sue could be left with no route to compensation? If your indemnity fails, it could leave you personally liable for any damages awarded!

With the government consultation still ongoing, the dental profession can be the positive force for change. Howden is a specialist indemnity insurance broker offering contract-based cover that is robust, broad, and fit for the modern age. If you have previously been with a MDO, our safety net cover provides cover not only for the future, but also for the past. Also, if an old insurer does exercise discretion – we will retroactively protect you for that period. This safety net means you can move to Howden with confidence.

If we can learn anything by the examples given, it is to protect your patients and protect yourself. Choose an insurance-backed policy from a specialist provider, who doesn’t just understand insurance, but also the unique challenges you face in the specific environment you operate in.