Law Firm Finance 101 – Medical Negligence Starter Guide


The growth in medical negligence litigation over the last few years is due to a number of interrelated factors. With medical specialists and health budgets spread too thin and a growing awareness of patient’s rights, South Africa has seen an exponential increase in both the number and size of medical negligence claims.

There are an increasing number of personal injury law firms, particularly Road Accident Fund attorneys, looking to diversify their law firms, by incorporating a medical negligence-practice.

Diversification is a sound strategy to have in business and investments, provided it can be executed properly. A diversified contingent practice allows for new streams of contingency fee returns and simultaneously diversifies the portfolio risk associated with the Road Accident Fund.

One should, however, be cognisant of the challenges of litigating a medical malpractice lawsuit. These include the costs of disbursements, lengthily duration, risks of litigation, and the real complexity of disputes.

The attorney needs to thoroughly research and determine if a client has a meritorious medical malpractice case. A negative outcome to a medical procedure does not always correlate with negligence on the part of the doctor or hospital.

In considering the merits of a claim, many of the attorneys which we partner with recommend that the following broad criteria are met:

  1. A detailed medical history from the client, hospital records, and doctor’s records as to the claim in question has been obtained.
  2. A due diligence comparison of these written records and the version of the client has been performed.
  3. The engagements and correspondence between the doctor and the client prior to the procedure have been considered.
  4. A reputable expert in the applicable medical field has been consulted to ascertain whether to determine whether the correct procedures were followed, compared to the standard of a reasonable doctor in the same situation.
  5. The matter’s merits and the underlying claim has been worked up prior to a summons being issued.
  6. The attorney needs to include as much as possible information and detail in the particulars of a claim, following the Uniform Court Rules. This is to avoid a situation where the defendant delivers an application to set aside your particulars of claim, in terms of Rule 23(1) and 30(1).
  7. Ensure that you are claiming for damages based on past and future medical expenses, loss of income, pain and suffering and in some circumstances loss of support.
  8. Make use of the Institution of Legal Proceedings Act 40 of 2002 when citing the defendant/defendants in your summons. It is vital to add the correct defendant to these proceedings as the hospital or state may assume vicarious liability.

By gathering all the facts and working up the claim first, the attorney will determine what the client’s expectations are and identify the correct cause of action.

The nature of a medical malpractice lawsuit is a highly sensitive one. Some of the nuanced challenges include the high costs of running these matters due to the requirement for expert medical testimony and analysis, the risk of a contingent litigation, the complexity of disputes and the protracted nature of cases, resulting in a large window (often years) between expense outlay and the recouping of fees.

The “cash gap” that falls between the start and conclusion of successful matters places many firms under financial strain. It can also constrain successful attempts at growing a practice through the processing of multiple matters simultaneously. Many law firms are unwilling to invest in the medical malpractice field for these reasons.

While cost constraints will always be an issue, we have found that more and more attorneys perceive value in pursuing these specialist claims and diversifying their personal injury practice.

Taurus Capital offers a tailor-made working capital facility for medical malpractice firms. This funding can be used for disbursements to medical and actuarial specialists, equipping a firm with the financial resources required to see a case through to completion or to litigate several cases simultaneously in order to scale a firm.

Please contact Taurus Capital, if you are considering exploring medical malpractice for your law firm. We offer bespoke financial solutions for all South African law firms.

Disclaimer: This article is for educational purposes only and should not be misconstrued as financial or tax advice. Consult an accountant or registered tax practitioner for advice specific to your financial situation.

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