Oktoberfarce Part 2

Well, the plot thickens since the last posting. Like a good beer, this yarn is chillingly good, has a thick head of froth and a satisfying rich taste to it. And I mean really, really, extremely rich taste.

We are of course talking about the Susan Lim legal saga. Since Oktoberfarce Part 1, much more has been revealed. For the avoidance of doubt, this posting in no way suggests that this hobbit supports what Dr. Susan Lim has done in terms of charging her late patient. On the contrary, this hobbit believes that Dr. Lim did overcharge and therefore had to face the professional consequences of doing so, especially with regard to the mark-ups she put on other doctors’ charges.

Anyway, back to the issue of the costs Dr. Lim was made to bear by SMC. It now transpires that there are TWO bills in question. There was a first bill sent to Dr. Lim for the costs incurred for work done in a High Court Case. The bill of ~$1 million submitted by Wong Partnership (SMC’s lawyers) was taxed down to $370,000 after appeal by SMC. A second set of bills for work performed in the SMC hearings of two disciplinary committees (the first committee recused itself, and a second one had to convened) amounted to some $1.3M. They included bills submitted by legal assessors and expert witnesses and costs of stuff such as binders. This $1.3M was slashed after a taxation hearing to $317,000. The main bulk of this being the $900,000 legal bills submitted by Wong Partnership, which was cut to $180,000.

Then, The Law Society of Singapore weighed in on the matter by way of a letter to the press (not specific to the Susan Lim case) that (The Straits Times, 16 October, “Don’t equate reduction of costs with overcharging”) “a winning party’s bill of costs was reduced on taxation should not automatically be construed as overcharging. Indeed, if a client is dissatisfied with his lawyer’s bills, he can also tax that bill in court”.  This Hobbit must state that The Law Society’s letter also said these comments are general in nature and do not refer to specific cases. They are nonetheless illuminating to this shire-bound hobbit.

Firstly, it is true that not all reduction of costs after taxation can be construed as overcharging – actual work may have been done and payable, but it is just that this work should not be paid by the losing party and has to be paid by the winning party. But there can also be instances that both parties should not pay and the lawyers just sent in a very high bill that the court had to tax down drastically.

Secondly, while overcharging is not automatically imputed after taxation cuts, what is the “ethical limit” whereby the magnitude or proportion of reduction becomes so egregious that overcharging becomes a distinct possibility that has to be considered? Indeed, in the aforementioned letter by The Law Society, it was stated that, “The Law Society does not condone overcharging by lawyers, and complaints about overcharging are subject to a statutory regime. Complaints made to the Law Society are referred to independent committees for investigation”. 

For the information of doctors, The Law Society is a statutory body with regulatory powers, unlike say, the SMA, which is just a registered society with no statutory powers.

Since the Courts have decided that charging by doctors is subject to an “ethical limit”, this hobbit supposes that lawyers too have some ethical limit in charging. For discussion’s sake, would a lawyer who charged five times of what he should have (as decided by a taxation hearing) be suspected of overcharging? This hobbit doesn’t know what should apply to lawyers, but certainly if a doctor charged five times more than what he should have, then this hobbit thinks this doctor should be investigated for overcharging. Especially when the bill claimed cannot be apportioned to the winning party as well – in other words, the total amount of work, regardless of who or how many parties pay, is only one-fifth of what was billed.

The next piece of nugget came on 26 October 2014. The Straits Times reported that, “the SMC is appealing the latest decision”; i.e. the second set of bills when $1.3M was reduced to $317,000. As mentioned, the bulk of this came from the $900,000 of legal bills that was reduced to $180,000.

If this is true, then it must be asked – why is SMC appealing? Why does it NOT agree with the Courts? The logic is stupendously baffling.

This hobbit believes strongly that the ONLY credible, responsible and right thing to do is for SMC to bargain down the bills with SMC’s lawyers. Failing which, SMC should tax its own lawyer’s bills in Court. It should not appeal against a Court decision.

Let this hobbit explain:

• In any SMC hearing, there are only TWO possible final outcomes – either the doctor is guilty or the doctor is innocent.

• Almost all doctors in Singapore buy professional indemnity (e.g. MPS) to pool risk.

• If the doctor is guilty, the professional indemnity organisation or insurance provider will foot most of the bill. This translates to higher indemnity premiums for practically all doctors in Singapore and yes, it would probably lead to higher healthcare costs, because doctors will factor this in when they charge patients.

• If the doctor is innocent, SMC has to foot its own bills. Since SMC is funded largely by doctors’ subscriptions and some government funding, this will lead to higher SMC registration fees and government taxes

• In other words, it doesn’t matter whether SMC wins or lose the case, bigger legal bills are borne by the medical profession and the government, which would ultimately lead to higher healthcare costs and taxes.

• The only one that benefits financially from bigger legal bills is the lawyer. Even the patient or complainant doesn’t benefit financially since SMC hearings cannot award damages to patients.

In other words, this is a classic case of the “heads you win, tails I lose” scenario.

The only exception to the above algorithm is when the doctor who doesn’t buy any medical indemnity protection also loses the case and has to fund the SMC lawyer’s bill from his own pocket. But how rare is that?

Therefore, the only sustainable and prudent stewardship that SMC should practise in the long run is to lower the rates that its lawyers charge. SMC should not, and indeed must not, appeal against the Courts’ taxation decisions, for goodness’ sakes! And if does, it should fully explain why it is doing so clearly and publicly.

Let’s get back to the bills again. Again, there are only TWO possibilities: either SMC has already paid the bills or it hasn’t.

• If SMC hasn’t paid the bills, then SMC should just go back and bargain down the bills with its lawyers or send the bills for taxation.

• If SMC has already paid the bills, and now finds out that it is seriously out of pocket since they can’t recover the costs from the losing party, then more questions need to be asked. Why was it so hasty in paying the bills? Who approved payment? Was there any appraisal and approval process put in place to check whether the bills are reasonable or not? Are the charges competitive? After, all SMC is buying a service using public monies and should check around for competitive pricing

This hobbit seriously thinks that the Auditor-General should be sent in to take a deep, hard look at the financial arrangements and operations of SMC. Because the purported decision of SMC to appeal is, at least on the surface, quite out of whack with what it should be doing – which, in addition to upholding medical ethics and professionalism, also help to keep healthcare costs and public expenditure down in the long run.

This is not your normal brew, folks. Something is brewing, and it is beginning to smell strange. Really strange.

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