Good Faith/Bad Faith — Varying Privileges Could Result In Significant Civil Liability

Two recent decisions highlight the importance of hospitals acting in good faith regarding physician privileges — each of which is explored in further detail below.

The Horne case demonstrates that Canadian courts recognize the intrinsic value of hospital privileges to a physician's reputation and professional success. Just as the Court of Appeal for Ontario's decision in Rosenhek gathered widespread attention for demonstrating that loss of income damages for the wrongful revocation of privileges could reach the heights of $3 million, the Horne case illustrates that damages for loss of reputation or career can also form a significant civil damages award. While the outcome for the hospital was not favourable in the Horne decision, the Beattie decision confirms that courts may provide hospitals protection for actions taken pursuant to the legislation in good faith.

Both the Horne and Beattie cases highlight that hospital boards and administrations must be careful in their decisions and actions to cancel, revoke, refuse, or vary physician privileges. Hospitals must recognize the broad impact of their decisions on the shape of a physician's career and that failing to exercise their powers in good faith may expose hospitals to considerable claims for civil damages.

Horne v Queen Elizabeth II Health Sciences Centre

In Horne v Queen Elizabeth II Health Sciences Centre, 2018 NSCA 20, the Nova Scotia Court of Appeal held that $800,000 was an appropriate award of damages for a physician's loss of reputation and research career arising from a "bad faith" summary variation of hospital privileges. This is the highest award of damages for loss of reputation in Canada. The decision highlights the need for hospital boards and administrations to follow proper process and consider the broad impact of their decisions to vary privileges, as failing to do so could result in significant civil liability.

Background

In 2001, Dr. Horne was a clinical and research cardiologist at Halifax's Queen Elizabeth II Hospital (the "Hospital"), operated by the Capital District Health Authority (the "Health Authority"). The majority of her work consisted of research. Her research relied heavily on her privileges at the Hospital's Heart Function Clinic (the "Clinic"), as she recruited research participants from the Clinic.

The issues with Dr. Horne's privileges stemmed from a conflict between her and the Clinic's director. The Clinic's director made multiple escalating...