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New Zealand: No-fault medical error

Colleen Flood and Lorian Hardcastle of the University of Toronto take a look at New Zealand's non-lawsuit compensation system:

In New Zealand, you can't sue for personal injury including injury as a result of negligence on the part of a doctor, hospital, nurse, etc.

A person injured by medical error receives some income compensation and rehabilitative services including treatments in private hospitals and clinics, home care, prescription drugs, physiotherapy, all things not covered by New Zealand's equivalent of medicare.

The good news for both injured patients and their doctors is that patients don't have to prove negligence on the part of their doctors.

The Kiwi no-fault system has many appeals. Many more patients will receive some assistance after injury including income supports and coverage for rehabilitation services right when they need them most.

Claims are processed within an average of 15 days as opposed to five years or more in the tort system.

In addition, the claims process is user-friendly � you can easily make your claim without a lawyer � as opposed to the cost and complexity of litigation. New Zealand's scheme seems manageable in terms of total cost; it covers 4 million people for less than $30 million per year or just over $7 per person, per year. ...

There is no evidence at all from New Zealand that there are higher rates of error because patients can't sue. ...

Although New Zealand has a no-fault system, there is still anecdotal evidence that doctors are reluctant to admit mistakes. This may result from fear of professional discipline or concern with reputation.

On the other hand, the New Zealand system has come under criticism because the size of awards is not generous (and has been eroded over time) and because some see it as arbitrary that ailments caused by medical misadventure are compensable yet similar ailments caused by illness itself are not.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.