Medical negligence: liability of investors and promoters

With investment in the health care sector now automatically routed to 100%, foreign investors are increasing their investment in the medical care business in India. Consequently, standards for legal liability of doctors, hospitals and promoters in medical negligence cases become important for investors looking to purchase a stake in a chain of hospitals with pending medical negligence claims.

While Indian courts have adjudicated on medical negligence cases for over 30 years, it is only recently that some clarity on standards of conduct and liability for medical negligence cases has emerged.

The Supreme Court ruling in Spring Meadows Hospital and Anr v Harjol Ahluwalia in 1998 held that patients were “consumers” under the Consumer Protection Act, 1986, thereby allowing plaintiffs to seek the remedies and protections available under the act.

Uday Walia is a partner and Palash Ranjan Gupta is an associate at S&R Associates. They can be contacted at uwalia@snrlaw.in and pgupta@snrlaw.in respectively.