Arkansas Court: New Hospital Liability Law Is Retroactive

Charitable hospitals with self-insurance plans can be sued for incidents that occurred before their pooled liability funds were established, the Arkansas Supreme Court has ruled.

The decision comes as a blow to not-for-profit hospitals like St. Joseph’s Mercy Health Center in Hot Springs, protected as a charity for more than a century under Arkansas law. The 2007 law put self-insurance and pooled liability funds on the hook for damages once avoided by some hospitals under the state’s charitable immunity laws.

“It’s a real big decision,” said Todd Turner, an Arkadelphia lawyer who filed the lawsuit.

In the case before the court, Charles and Linda Archer sued St. Joseph’s over treatment of their 6-year-old son Mason. After a March 2005 car crash, Mason received medical treatment at the hospital. Though Mason suffered serious spinal-cord injuries in the crash, a doctor misread a CT scan and a nurse tried to stand Mason up, causing permanent paralysis, the Archers claimed.

On March 9, 2007, the Archers sued the hospital and others over Mason’s treatment. On March 30, 2007, the new law on suing liability funds took effect. The Archers later changed their lawsuit to include the hospital’s liability pool.

Garland County Circuit Judge Marcia Hearnsberger dismissed the suit against the liability pool, agreeing with the pool’s claim that the new law couldn’t be applied to it retroactively.

In the court’s recent ruling, Associate Justice Robert L. Brown said case law held that such negligence suits should be considered “remedial in nature.”

The new law “did not create a new legal right for injured parties,” Brown wrote. “Instead, it clarified that those injured parties have a remedy against a liability pool for the underlying claim of negligence when (the) charitable immunity of a hospital is involved.”

The court set the case back to Garland County for continued proceedings against the liability pool.

St. Joseph’s said it was not prepared to respond immediately.

Charitable immunity protects agencies, trusts and other organizations created exclusively for charities from liability for the actions of a person working for the organization. But the immunity has been challenged in recent years in other states, particularly in sex abuse lawsuits against archdioceses of the Roman Catholic Church.

In the opinion, Brown noted a previous case before the court involving a woman injured at St. Joseph’s as hospital employees pushed her in a wheelchair to a waiting car. In that decision, the court found that the hospital’s self-insurance program did not meet the legal definition of insurance – something changed by the 2007 law.

Turner said the high court’s decision meant anyone could be retroactively covered, so long as the statute of limitations on their case hadn’t run out. Typically, that runs two years for an adult, but much longer for a child, Turner said.

St. Joseph’s is run by the Sisters of Mercy Health System, which includes St. Edward Mercy Medical Center in Fort Smith and Mercy Medical Center in Rogers.

Turner said he was pleased by the court’s decision.

“My clients are just fine, fine people and it’s such a sad story,” Turner said. “I’m really happy for the family right now.”