What it does
The Health Care Liability Act 2001 (NSW) establishes a regulatory framework for professional indemnity insurance covering civil liability arising from the provision of health care. At its core, s 19(1) prohibits any person from practising as a medical practitioner in New South Wales unless covered by "approved professional indemnity insurance". This approval is not left to the market: s 20 provides that insurance is approved only when the kind, extent, terms and conditions have been expressly approved by ministerial order published in the Gazette. The Act therefore operates as both a licensing condition for medical practice and a quality-control mechanism over the insurance products themselves.
Section 3 sets out the statutory objects in detail. These include facilitating access to fair and sustainable compensation for persons sustaining severe injuries (s 3(1)(a)), keeping medical indemnity premiums sustainable by limiting compensation for non-economic loss in relatively minor injury cases while preserving full compensation for severe cases (s 3(1)(b)), promoting equitable distribution of high-cost severe-injury claims across the indemnity industry (s 3(1)(c)), encouraging medical indemnity providers to contribute to risk management and quality improvement (s 3(1)(d)), and improving public and professional information about claim costs and trends (s 3(1)(e)). Subsection 3(2) expressly directs courts and administrators to interpret the law (both statute and common law) in a manner that acknowledges the legislative intention to restrict non-economic loss compensation. Subsection 3(3) imports a purposive interpretation rule, preferring constructions that promote the objects and expressly preserving the generality of s 33 of the Interpretation Act 1987.
The Act defines its key concepts broadly. "Health care" in s 4(1) means any care, treatment, advice, service or goods provided in respect of physical or mental health, and expressly includes a failure to provide health care (s 4(4)). A "health care claim" is any civil action for damages against a health care provider alleging injury or death caused wholly or partly by fault in providing health care. The definition of "health care provider" is layered: it covers medical practitioners covered by approved insurance (or, until Part 3 commenced, any professional indemnity insurance), public health organisations, and licensees of licensed facilities, with transitional rules for pre-assent and post-assent incidents (s 4(1)). "Non-economic loss" is exhaustively listed as pain and suffering, loss of amenities of life, loss of expectation of life, or disfigurement (s 4(1)). "Professional indemnity insurance" includes both conventional insurance and discretionary indemnity arrangements (s 4(1)).