Question

Ostensible authority has been used by plaintiffs to hold a hospital liable for the torts of its independent contractor physicians. Ostensible authority is created when a hospital presents itself to the public as a provider of health care services and in some way leads the patient to believe that an independent contractor physician with staff privileges is an employee of the hospital Explain what ostensible authority is in depth

Answer 1

One of the goals of the tort system is to impose legal responsibility on certain individuals (tortfeasors) for certain conduct in order to remedy past harms and deter prospective behavior.

Generally, the negligence of one individual cannot be assigned to another. However, with every rule there are exceptions. There are several tort and agency doctrines that impose responsibility upon one person for the failure of another, when a special legal relationship exists that creates a duty to exercise a standard of care that a reasonably prudent person would use in the same or similar circumstances. Examples of doctrines that fall within this category include: respondeat superior, apparent/ostensible agency and agency by estoppel.

When a hospital is alleged to be liable for a physician's negligent conduct, the analysis is usually dependent on the employment classification of the physician. Traditionally, hospitals will staff their facilities with employees (nurse, technicians, resident physicians) and independent contractors.

The majority of physicians practicing within a hospital are independent contractors in which a hospital cannot be held liable to third parties based on respondeat superior. Section 2 of the Restatement (Second) of Agency defines an independent contractor as one who contracts with another to do something for him but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of an undertaking.

While a person may be designated an independent contractor in relation to the person hiring them, an agency relationship may result in certain circumstances.

Apparent authority results from a manifestation by the principal to a third person that another is his agent. The manifestation may be made directly to the third person or to the community at large by signs or advertising. But, "apparent authority exists only to the extent that it is reasonable for the third person dealing with the agent to believe the agent is authorized.

Ostensible agency in the medical field is a type of vicarious liability. In this case, a healthcare organization – such as a hospital – can be held liable for the negligence of any healthcare provider under its control. In order for this type of ostensible agency to apply, something must have occurred to lead the patient to reasonably believe that the healthcare provider was actually employed by the organization. This belief by the patient may be what determines the organization’s liability, whether or not an actual employment relationship exists.