I have been advising upon some exciting new (medical) business ventures recently. Our typical Life Sciences business shall often have considerable Medical Malpractice exposures.
A question that has been asked on several occasions is: Can a medically practising limited company director ‘wind-down’ a limited company and absolve themselves against medical malpractice claims?
Personal Injury Claims
In the event of a claim brought for personal injury, this may be made against the company. Or it may be made against the clinician themselves, particularly where there are allegations of negligence in relation to the treatment provided. If the clinician is an employee of the company the limited company would generally be vicariously liable for the clinician’s actions.
Under the Third Party (Rights against Insurers) Act 2010 an injured party can bring a claim against the insolvent company’s insurers which removes the need to take steps to restore the company to the Company’s Register for the purpose of pursuing a claim for personal injury. This would be assuming that the company had a relevant policy which might respond. The liability of the company should therefore be covered.
Medical Malpractice Insurance
If the company has been wound up the clinician would still be personally liable for their actions in the course of their clinical practises. If they were an employee of the company, they would still be obliged to maintain their own Medical Malpractice insurance/indemnity even though the company ought to be vicariously liable. Maintenance of their own insurance/indemnity is usually a requirement of their medical council (GDC/GMC)
To summarise, winding up of a company would not allow the clinician to avoid liability for personal injury – they have a personal liability to the patient for their acts or omissions. A claim might also be brought against the company’s insurers even though the company has been wound up.