Vicarious Liability

From Coverys Risk Management

Most physicians and clinicians are aware of how their own actions and decisions affect risk and patient safety; however, it’s easy to forget about vicarious liability. This type of liability may apply when adverse outcomes result from the actions (or inactions) of third parties or subordinates.

The application of vicarious liability is based on two legal principles. The first relates to the acts of employees and is referred to as respondeat superior, which is Latin for “let the master answer.” For respondeat superior to be applied, an employee’s negligence must take place while he or she is acting within the scope of his or her role within the practice. This principle means that you may be held liable for the negligent acts of your employees or partners, even if you did not commit the act yourself.
The second principle deals with independent contractors and is often referred to as “apparent authority” or “ostensible agency.” The liability principle of apparent authority/ostensible agency is based on the injured person’s reasonable belief that the independent contractor is acting on your behalf or that of your practice.

This principle is commonly applied to emergency room physicians. While these physicians are frequently employees of an emergency room (ER) group practice that has contracted with the hospital, it’s understandable that patients may believe emergency room physicians work for the hospital. Because of this perception, the hospital can be held vicariously liable for the acts of physicians in their ER.

How Does Vicarious Liability Apply?
As described above, the acts of an employee in a physician office could result in a situation of vicarious liability. For example, you or your practice may be held vicariously liable if an employee damages a nerve while drawing a patient’s blood. Although you did not perform the blood draw, you may be held liable for the patient’s injury according to the principle of respondeat superior if the employee was acting in a role appropriate for his or her job description.

Also, as explained previously, vicarious liability applies to independent contractors. For example, if you are a cardiologist who contracts with a service for an ultrasound technician to perform echocardiograms or stress tests in your office, you are at risk for vicarious liability allegations. In this case, you or your practice can be held responsible according to the principle of apparent authority/ostensible agency if the ultrasound technician acts negligently and your patient thinks the technician was working for you.

In general, you should recognize that three conditions must exist for vicarious liability to be applied:
  1. there must be a legal relationship (e.g., employee, independent contractor);
  2. the individual performing the act must be working within the scope of his/her role; and
  3. the individual must be acting on your behalf or that of your practice.
How Can I Mitigate the Risk of Vicarious Liability?
There are many steps your practice can take to reduce the risk of vicarious liability, including:
  • Consulting with an attorney about protecting the practice from exposure to vicarious liability.
  • Supervising support staff members, unlicensed assistive personnel, and advanced practice professionals.
  • Developing agreements with employed physicians.
  • Credentialing or certifying healthcare personnel.
  • Exercising caution with independent practitioners who share office space.
With respect to employees, consider the following:
  • Conduct reference checks and criminal background checks (if allowed by law in your state) and gauge employees’ competency before hiring.
  • Validate the credentials of each prospective employee before hiring.
  • Ensure that job descriptions outline specific job functions and responsibilities.
  • Develop an orientation program that addresses policies and procedures, competency, and mentor programs.
  • Develop a process to review and observe employees’ performance.
  • Develop policies and procedures for safe patient care.
  • Communicate promptly with staff about any additions/changes to policies and procedures.
  • Establish a standardized employment review process.         
Independent Contractors
With respect to independent contractors, consider the following:
  • Ensure that the contract addresses the clinical responsibilities of the independent contractor.
  • Ensure that office advertising, signs, notices, and stationery clearly distinguish your practice and physicians from independent contractors providing services at the practice.
  • Develop a contract review process that includes timely review prior to contract renewal.
  • Stay informed regarding new regulations or standards that may impact the terms of the contract prior to renewal.
Whether you choose to employ staff members, work with independent contractors, or do both, the risks associated with vicarious liability should be addressed proactively. You can effectively manage the risks of vicarious liability by understanding how this legal principle applies to you and your practice and then implementing the risk management strategies outlined above.

No legal or medical advice intended. This post includes general risk management guidelines. Such materials are for informational purposes only and may not reflect the most current legal or medical developments. These informational materials are not intended, and must not be taken, as legal or medical advice on any particular set of facts or circumstances. 

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