American Journal of Law & Medicine

Conflicts of interest in Canadian health care law.(Conflicts of Interest in Health Care)

I. INTRODUCTION

A study of conflicts of interest in Canadian health care law supposes that Canadian law contains features that distinguish it from law in any other jurisdiction. There was a time when law applied in the Canadian Common Law jurisdictions(1) lacked these features. The law and legal process of the Common Law jurisdictions derived directly from England, whereas the Civil Law of Quebec was fashioned on the French Code Napoleon. Indeed, as recently as 1959, a distinguished Canadian academic commentator observed that "a perusal of Canadian law reports ... conveys the impression that most of the opinions reported there are those of English judges applying English law in Canada, rather than those of Canadian judges developing Canadian law to meet Canadian needs with guidance of English precedent."(2) However, modern developments in Canadian society in general, and in its health care system in particular, now justify the claim that Canadian law is sufficiently distinctive to warrant its inclusion in comparative studies of legal regulation of health care professionals' conflicts of interest.

Legislation and particularly jurisprudence have come to focus on conflicts of personal interest in ways that can resolve or prevent conflicts, and afford remedies for those that have prejudiced patients' interests. The legislation primarily addressed here is that of Ontario, where the Regulated Health Professions Act(3) has created a legal framework for the activities of over twenty self-governing health professions ranging from audiology, through dentistry, medicine, nursing and pharmacy, to respiratory therapy.(4) A common procedural code affords the Councils that govern each of the regulated health professions the power to make regulations "prescribing what constitutes a conflict of interest in the practice of the profession and regulating or prohibiting the practice of the profession in cases in which there is a conflict of interest."(5)

This legislative initiative is consistent with a modern tendency injudicial preference in Canada to invoke health care practitioners' duty to maintain high ethical standards.(6) Courts have built upon well-recognized principles of fiduciary duty to compel observance of the tenets of good faith and trust to which the traditional health care professions have long claimed adherence, embodied in the spirit (though not necessarily in all of the historic provisions) of the Hippocratic Oath. Health care professionals must not only take patients' preferences into serious and often decisive account in serving patients' best interests,(7) but also resist temptations to use access to and information about patients for their own material, protective, or other advantage.

Fiduciary duties have long restrained the more powerful parties in unequal relations from exploitation of the power afforded by factors such as superior knowledge. For instance, even without liability of criminal conviction, profiteers from insider trading information have been held to be constructive trustees of acquired funds, the beneficiaries being those with whose material interests the traders acted in conflict.(8) Courts are now imposing compensatory duties on health care professionals who exploit their superiority in relations with dependent patients beyond material interests to include, for instance, sexual gratification.(9) The courts are providing a framework to address how health care professionals may reconcile their clinical responsibilities to patients with their administrative responsibilities to allocate scarce institutional resources. Courts also address whether professionals may apply personal philosophical or religious convictions in dealings with patients that may compromise allegiance to patients' expressed or implied preferences.(10)

In this Article, the next section details the development of conflict of interest law in Canadian courts. Section III looks at legislative and regulatory approaches to conflict of interest, particularly the Regulated Health Professions Act and Section IV examines court treatment of professional tribunal's rulings under the legislation. Section V focuses on controls outside the health care professions on conflicts that arise in the university and research settings. The last section of the Article examines the challenge of recent economic developments and debates on health priorities to conflicts of interest law.

II. JURISPRUDENTIAL DEVELOPMENTS

Canadian law on conflict of interest keeps faith with its conditioning in English law, built upon evolving judgments that reflect equitable presumptions of undue influence. Physicians were free at Common Law to contract with prospective patients to render them services. However, if the fee agreed exceeded what was reasonable according to the time and skill involved and prevailing rates of remuneration, courts of equity would presume that the physician had exploited a superior bargaining capacity for his own advantage and exerted undue influence on the disadvantaged party. The same equitable presumption governed unduly beneficial agreements made between, for instance, lawyers and clients, and clergymen and congregants. It was for the physician, lawyer, or clergyman to discharge the legal burden of showing that no undue influence had been exercised but that the patient, client, or congregant had taken independent advice before entering the agreement, or had at least convenient access to such advice. The same rebuttable equitable presumption governed gifts made inter vivos or by will to physicians, lawyers, or clergymen or to the hospitals, churches, or other institutions in which they had personal interests. It was not to be presumed that physicians, lawyers, or clergymen were necessarily venal or corrupt, but only concluded that they bore the procedural burden of showing that they had acted conscientiously, and had not abused their positions of trust for their material, spiritual, or other advantage.(11)

Principles of fiduciary duty reinforce and extend equitable presumptions of unconscionable advantage through undue influence, but Canadian courts, compatibly with the equitable tradition of addressing issues in terms of their substance rather than their mere forms, tend to resist rigid categorization of the type of wrong that conflict of interest represents. The Supreme Court of Canada was divided in its approach to the 1992 case of Norberg v. Vwnrib,(12) in which a physician extorted sexual favours from a young woman in exchange for satisfying her addiction to a pain-killing drug. Subsequently commenting on the different approaches its members took, the Court has recently observed that:

[T]he law's response to the plight of vulnerable people in power-dependency

relationships gives rise to a variety of often overlapping duties. Concepts such

as the fiduciary duty, undue influence, unconscionability, unjust enrichment,

and even the duty of care are all responsive to abuses of vulnerable people in

transactions with others. The existence of a fiduciary duty in a given case will

depend upon the reasonable expectations of the parties, and these in turn

depend on factors such as trust, confidence, complexity of subject matter, and

community or industry standards. For instance in Norberg ... the Hippocratic

Oath was evidence that the sexual relationship diverged significantly from the

standards reasonably expected from physicians by the community.(13)

The Court's disarray in Norberg may have resulted from the plaintiff presenting her claim primarily in battery and breach of contract rather than in a central allegation of breach of fiduciary duty. Justice Sopinka was sympathetic to the plaintiff's complaint that the physician's breach of duty arose under the law of contract and torts, observing that:

This professional duty arises out of the relationship of doctor-patient which is

essentially based on contract. Breach of the duty can be the subject of an

action in either contract or negligence.(14)

He added that:

[C]ertain obligations that arise from a doctor-and-patient relationship are fiduciary

in nature; however, other obligations are contractual or based on the

neighbourhood [i.e. neighbour] principle which is the foundation of the law of

negligence. Fiduciary duties should not be superimposed on these common

law duties simply to improve the nature or extent of the remedy.(15)

However, Justices McLachlin and L'Heureux-Dube observed that the judgment of their colleague Justice LaForest in McInerney v. MacDonald,(16) decided one week before Norberg, "confirms the fiduciary nature of the doctor-patient relationship,"(17) and judged the case in almost exclusively fiduciary terms.

McInerney arose from a physician's refusal to make available to her patient details of the patient's medical file transferred to the physician by the patient's former physicians, fearing in part that disclosure could incur proprietary or other legal liability. Giving judgment for the Court in the plaintiff 's favor, Justice LaForest found that:

The fiduciary duty to provide access to medical records is ultimately grounded

in the nature of the patient's interest in his or her records .... [I]nformation

about oneself revealed to a doctor acting in a professional capacity remains, in

a fundamental sense, one's own. The doctor's position is one of trust and

confidence. The information conveyed is held in a fashion somewhat akin to a

trust. While the doctor is the owner of the actual record, the information is to be

used by the physician for the benefit of the patient .... The patient's interest

being in the information, it follows that the interest continues when that information

is conveyed to another doctor who then becomes subject to the duty to

afford the patient access to that information.(18)

The concept of the patient's "beneficial interest" in information held by the physician-trustee rests on the same historical foundation in the equitable law of trusts as the fiduciary requirement that the physician resolve any conflict of interest in favor of the patient.(19)

The uncertainty of approach reflected in Norberg was revisited by Justice LaForest in Hodgkinson,(20) where he observed that:

The difficulty in Norberg was that the sexual contact between the doctor and

patient had the appearance of consent. However, when the pernicious effects

of the situational power imbalance were considered, it was clear that true consent

was absent. While the concept of a "power-dependency" relationship

was there applied to an instance of sexual assault, in my view the concept

accurately describes any situation where one party, by statute, agreement, a

particular course of conduct, or by unilateral undertaking, gains a position of

overriding power or influence over another party. Because of the particular

context in which the relationship between the plaintiff and the doctor arose in

that case, I found it preferable to deal with the case without regard to whether

or not a fiduciary relationship arose. However, my colleague Justice McLachlin

did dispose of the claim on the basis of the fiduciary duty, and whatever may be

said of the peculiar situation in Norberg, I have no doubt that had the situation

there arisen in the ordinary doctor patient relationship, it would have given rise

to fiduciary obligations. …

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