When seeking legal advice for complaints or referrals, it is important for health practitioners to understand the scope of their Professional Indemnity Insurance (PII). PII generally covers legal defence costs, assistance during investigations, and any damages or penalties that fall within the policy terms. However, most insurance policies contain clauses that prohibit practitioners from admitting liability without the consent of the insurer.[1] If a practitioner admits guilt or accepts fault without the insurer’s prior consent, the insurer may decline to provide cover for legal costs or indemnity.
This causes a degree of conflict as there are benefits in accepting responsibility as it demonstrates accountability to the investigating body and can mitigate the penalty being imposed by the Tribunal when facing disciplinary proceedings. This leaves the practitioner exposed to losing coverage for their legal fees.
It can also assist a practitioner’s case if they are able to show that they are willing to improve and have taken action toward bettering their practice, however, this also comes with a level of acceptance of fault. If they persist in defending matters that they should admit to it can also be held against them as failing to show any insight or learnings into their behaviour as a pharmacist which can result in a higher penalty being imposed.
Practitioners must therefore balance demonstrating accountability and proactive remediation with complying with policy obligations. If a practitioner is unsure about the best way to proceed then obtaining a second legal opinion (which will probably not be covered by the insurer) should be considered to determine the best option under the circumstances.
We have dealt with clients who have been denied coverage (and then sought to engage our firm independently) during these disciplinary proceedings and the loss of coverage can be a significant problem if this occurs shortly before a hearing, or just before the deadline to file an appeal. Getting an answer on this question early or at least knowing the risks makes any legal concerns much easier to manage.
Contact Andrew Lambros, Managing Director, for advice on responding to a complaint or notification.
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This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific circumstances It is intended for information purposes only and should not be regarded as legal advice. Further professional advice should be obtained before taking action on any issue dealt with in this publication.
[1] Pharmaceutical Society of Australia, ‘Professional Indemnity and Public & Products Liability Insurance Policy Wording’ (2021) 28.