Liability for Non-Employees: Beware Apparent Authority 

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From Lexology, Kim Stanger discusses a recent case which said that a hospital might be liable for the actions of an independent contractor. The court discussed the theory of apparent authority which might result in a hospital being liable in some circumstances. Kim writes:

The Court cited the following factors as supporting the theory of apparent authority:

  • The hospital contracted with the contractor to provide relevant services to hospital patients.
  • The hospital represented that the contractor was the “manager” of the hospital service line.
  • Hospital advertisements did not disclose that services were performed by independent contractors.
  • The hospital’s consent forms did not identify the contractor as an independent contractor or expressly disclaim liability for the contractor’s services.
  • The consent forms used by the contractor were on the hospital’s letterhead.
  • The hospital allowed the contractors to use hospital scrubs and name tags bearing the hospital’s name.
  • The hospital billed the patient for the services performed by the contractor.

Courts in other jurisdictions which recognize the apparent authority theory have also cited factors such as the following:

  • Whether the hospital supplied or assigned the contractor.
  • Whether the contractor’s services are typically provided in and as part of the hospital’s services, e.g., emergency room, anesthesiology, or radiology services.
  • Whether there was notice to the patient that the contractor was independent of the hospital through, e.g., advertising, consent forms, badges, oral communications, etc.
  • Whether patient selected the provider or had prior contact with practitioner.
  • Whether patient had special knowledge of contractual relationship.

Kim also offers suggestions for ways to avoid liability under the theory of apparent authority.

Read the full story at Liability for Non-Employees: Beware Apparent Authority – Lexology

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