Discovery – Spoliation of Evidence Charged Against Hospital for Loss of Records | HIT Blawg

On April 16, 2010, in Howard Regional Health System d/b/a Howard Community Hospital, et al. v. Jacob Z. Gordon b/n/f Lisa Gordon , the Indiana Court of Appeals issued an opinion holding Howard Community Hospital (“Howard Community”) liable for losing medical records and thereby making it impossible for a patient to pursue a medical malpractice case against an obstetrician.  Jacob Gordon suffers from various medical complications that could have been caused by breaches in the standard of care when he was born.  Following his birth and after having an attorney review the case, Jacob’s mother filed a medical malpractice claim against Howard Community, the Community Family Health Center, and the obstetrician who delivered Jacob.  After she filed suit, Jacob’s mother requested certain medical records from Howard Community.  Howard Community responded that it had lost some of the records from Jacob’s birth.  A trial court entered partial summary judgment in favor of Jacob’s mother, finding that Howard Community had a duty to preserve the medical records, that it breached the duty, and that the breach made it impossible for Jacob’s mother to pursue the medical malpractice case against the obstetrician.  The Indiana Court of Appeals affirmed the trial court’s decision.

This case concludes that a patient can have an independent third party “spoliation” claim against a health care provider for losing medical records.  Significantly, the claim is outside the Indiana Medical Malpractice Act and does not need to be reviewed by a medical review panel prior to being heard in state court.  In this case, the Court found that a hospital is required by Indiana statute to maintain medical records and if the hospital violates that statute, it commits negligence per se, making an independent spoliation claim available to the patient.

The Court found that summary judgment was appropriate because Gordon’s mother had established that the record loss was the proximate cause of making it impossible for her to pursue the case against the obstetrician.  Counsel for the hospital has indicated that a transfer petition to the Indiana Supreme Court will likely be filed.

via HIT Blawg: Discovery – Spoliation of Evidence Charged Against Hospital for Loss of Records.

Expanded Whistleblower Program Could Aid FCPA Enforcement | Dow Jones Newswire

More anti-corruption enforcement would likely be one result of a proposed widening of the Securities and Exchange Commission‘s whistleblower “bounty” program, experts say.

An expansion of the program passed the House of Representatives as part of the financial regulatory-reform bill, and its Senate companion bill has been approved by the Banking Committee. Differences in the two bills could affect the whistleblower program, but experts on anti-corruption said that whatever its final form, an enhanced program would likely result in more enforcement action.

“It certainly should increase enforcement activities because you’re giving financial incentives,” said Thomas Fox, a Houston-based corporate compliance attorney in private practice, who blogs under the name TFoxlaw.

The whistleblower bounty program currently only rewards those who provide the agency with information about insider trading, and it’s been used only five times since its inception 20 years ago. Both the House and Senate are seeking to expand it to all securities violations, including those of the Foreign Corrupt Practices Act, which bans the bribing of foreign government officials.

There have been a rising number of FCPA enforcement actions in recent years in any case, with 34 prosecutions netting $435.3 million in penalties in 2009, according to the Department of Justice. In 2008, Justice said 17 prosecutions netted $497.6 million in penalties.

Among key language differences between the bills, the House version, which passed in December, has no set minimum percentage of the collected funds in a case for the SEC to pay to a whistleblower. The SEC has greater discretion in determining the bounty than it does under the Senate’s version, which has a 10% minimum. Both have a 30% maximum payout.

Theoretically, a whistleblower could come into a huge windfall based on this formula. Consider the case of Siemens AG, which paid $800 million in fines to the SEC and the DOJ in 2008 after pleading guilty to violating the FCPA. Had those penalties been the result of information obtained by a whistleblower, the person could have received a $240 million payout, or a minimum bounty of $80 million based on the Senate language.

Mike Koehler, an assistant professor of business law at Butler University in Indiana, who is an expert on FCPA-related issues and blogs under the name FCPAProfessor, sees such sums being an effective incentive.

“Any time you incentivize rank-and-file workers with a lot of money, rational actors are going to respond. You’re going to see an increase in enforcement activity regardless of whether the action violates the law,” Koehler said.

However, such high rewards are extremely unlikely, according to Stephen Kohn, executive director of the National Whistleblowers Center, a nonprofit devoted to protecting informants. “If you look at the False Claims Act, which is the model, most rewards are separately negotiated and resolved, and [they] rarely equal the full statutory amount that the whistleblower believes they are entitled to,” he said.

via Expanded Whistleblower Program Could Aid FCPA Enforcement.