Can Doctors providing health services in LLCs be rersonally liable for patient injuries? Landmark Czech Supreme Court ruling shakes the medical field.
Botched Operation - Who to Sue?
The patient underwent hand surgery. She was operated on by a physician who was the sole partner and sole managing director of a limited liability company - the provider of medical services. It was this LLC (Czech: s.r.o.) that entered into the health care contract with the patient.
The doctor made a mistake during the operation and as a result the patient's little finger had to be amputated. The patient therefore sought compensation for her injuries. But against whom? She sued both the LLC (s.r.o.) and the doctor himself.
It could be argued that the meaning and purpose of establishing s.r.o. it is (in particular) protection of the partner's personal property against possible negative consequences of the activity. The partner himself (as the owner of the company) guarantees the company's obligations only up to the amount in which he has not yet fulfilled deposit obligation. This is the property of s.r.o. and its partner (owner) separated. In other words: if the company incurs any debt, this debt does not burden its partner.
The doctor in our case relied on this very principle. If a medical LLC (s.r.o.) enters into a contractual relationship with a patient, the rights and obligations arise from this for the company, not for the doctor directly.
Liability of the Doctor and s.r.o.
The jurisprudence has now reconsidered this - as to the liability of a doctor who culpably causes harm to the patient's health by proceeding non lege artis. The doctor (statutory representative and partner of the health service provider) is responsible as an assistant to the healthcare provider. In this case, one cannot talk about his subordination to the company: he personally performs professional activities as an assistant to his own legal entity. That is why he is responsible for the damage caused together with s.r.o.
Same if he were in the position of an employee of a one-member s.r.o.: he himself would figure both in the position of an employee and in the position of an employer, whose instructions he should follow, and therefore he is not covered by the protection provided to employees dependent on the instructions and rules of employers in terms of liability for harm.
Does this Only Apply to Doctors in Single-Member LLCs (s.r.o.)?
The Czech Supreme Court concluded that it would not make good sense to hold some medical professionals liable for injuries caused by a non lege artis practice (e.g., physicians operating their practice as individuals) and not those who operate their practice as assistants to a limited liability company they control.
However, these conclusions do not apply to physician-employees in organizational subordination to an employer (e.g., a hospital). These physicians are limited by the employer's guidelines and equipment, which may affect the quality of health care.
This is a breakthrough decision for health professionals with their own surgeries. (according to Case law 25 Cdo 2613/2022)
What other professions there could be such "piercing of the corporate veil"?
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