Doctors Treating the Unconscious--Implied Contracts

Economics Political Theory
1

If a doctor chances on a stranger lying unconscious on the street, treats him, and later demands a fee, has he a legal claim?

Judge Richard Posner says yes, on the grounds of an “economic” analysis of an implied contract. In the hypothetical above, the costs of a voluntary transaction would be prohibitive, because of the aforementioned incapacity. In other cases, say the person is bleeding out, the cause of high transaction costs is time, preventing a proper negotiation and the exchange of consideration necessary to form a contract.

In these cases the law considers whether, had the transaction costs not have been prohibitive, the parties would have come to terms and what the terms would have been. In this way the law forces payment from the defendant under the doctrine of restitution.

While restitution is not considered a contract, per se, it has essentially the same outcome and is known as a quasi-contract.

What do you think about this legal concept, and furthermore, implied contracts in general?

2

I think Posner’s wrong on this, particularly since implied contract is, in my eyes, irrelevant.

Say, for example, that you see that a man has grabbed a woman and is threatening her with a gun to her head. You are armed, and not only do you have a clean shot at the gunman to end the situation, the gunman is unaware of you. So you take out your gun and shoot him dead. If the shooter were to come back and charge the woman for his services, would we say he is justified in doing so?

There is no implied contract; there is no contract, period. One person acted in a situation, free of contract and free of obligation. The actor cannot then turn around and impose contract and obligation upon someone who did not agree to (and was in fact completely unaware of) their services.

3

Implied contract is pretty contradictory as far as I’m concerned. Implied consent in such a circumstance as you described is something else. Granted, I haven’t devoted much thought to this area, but in my view to say that the doctor has a right to demand compensation is out of bounds.

4

I would say yes, the individual should pay the doctor for his services and he should get a black market on his credit for non payment (unless he is indigant, at which case the doctor should be expected to treat him as a form of charity).

5

There are good samaritan laws to protect off duty health care workers in such situations.

6

He doesn’t.

Beside as a practical matter, even if we pretended he did, it would be a completely un-enforceable. All the stranger needed to do to avoid paying the fee would be to claim he had not given consent and did not wish to be treated and demanded restitution from the doctor for having interfeared with his bleeding on the street unscounscious.

7

This is really an interesting question.

I have to agree with Posner. :stuck_out_tongue: If we lived in a world without transaction costs, there would be no need to have a legal system to settle disputes like this. It is only when transaction costs are significant that the legal system becomes important (as noted by Coase in his Nobel Prize Lecture: http://www.nobelprize.org/nobel_prizes/economics/laureates/1991/coase-lecture.html).

Therefore, I agree with Posner that judges should make decisions that would closely match the market outcomes that would have emerged had transaction costs not been so high. In this case, I think it is fair to say that 9/10 of people dying on the street would have agreed to pay the doctor to help them. So the judge’s decision should reflect that.

Of course, there will be 1/10 people that wouldn’t have paid. So the decision rule isn’t perfect. But is it better to forego 9 mutually advantageous transactions to prevent the 1 that would not have been made? If you think so, how would you prefer judges to make decisins?

8

But shouldn’t the judge make a decision based on the facts of the case in front of him, rather than the facts of other cases? It doesn’t seem relevant what 9 other people would have done in the same situation. The question is would the person in front of the judge had in fact given consent to be treated against a fee if it weren’t unscounscious at the time. If the guy claims consent was not given, as he did not and would not want that, then how can the judge infer it was in fact given? Even if the defendant is in fact lying there is really no way for anyone to prove that.

9

If the guy claims consent was not given, as he did not and would not want that, then how can the judge infer it was in fact given? Even if the defendant is in fact lying there is really no way for anyone to prove that.

Why would anyone then ever agree to pay the doctor after the fact if they can just say “oh, i wouldn’t have agreed to pay him”?

Deciding the case based on the defandant’s word after the fact would wind up being the same as saying the doctor has no right to compensation.

10

Student:

This seems extraordinarily speculative and presumptive. Not that it couldn’t be simulated with some degree of accuracy, but the idea of it seems to contradict the voluntary principle of a transaction in the first place.

This seems to foray into utilitarianism. Although I agree that the interactions are most likely going to be mutually advantageous, I think it’s a slippery slope to claim that they are transactions in the first place. To exclude affirmative assent is to go down the murky and impossible “mens rea” path. This, of course, opens up all other sorts of litigation issues regarding intent and judicial omniscience. But then again, some people think that’s a good thing.

I’m not sure how you would enforce this “transaction” without violating some structural principles of libertarianism.

11

I don’t know why.

I accept given this option it is possible few if anyone would pay. But how is that relevant? So people are capable of dishonesty. But we can’t change what law says based on the fact humans are capable of lying. Law is what law is. If people are dishonest then that is the shortcoming of the people, not of the law.

If somebody would think nobody ever paying up was a problem they should start a campaign for greater honesty, not try to subvert the law to say consent in such cases is in fact always given, even when it is really not (in the cases of 1/10 you speak of).

12

Yea I don’t think student is a libertarian.

Also if you had this sort of blanket rule which said the doctor must be paid, it would be funny because if you were poor it would be dangerous to pass out in the public and bleed in more ways than one. You could wake up only to learn you were now bankrupt!

Then to avoid poor people going potentially bankrupt like that, after being helped by expensive doctors, we would also need regulation. We would need some kind of document stating how much it was reasonable for doctors to charge for a given type of intervention. We would have price controls! How is that for encouraging market transactions!

It becomes obvious this is untenable as a libertarian position. It is an intervention that begets more intervention.

13

I wouldn’t accept the above so easily. It is much more realistic/likely that 9 out of 10 people would voluntarily pay the doctor, even without the obligation to do so, than that they would not. Moreover, praxeologically, the doctor would gain both (1) a psychic and (2) a reputational return from taking the risk of helping someone without their consent, even if he did not receive a payment for it. The payment would simply be a bonus, and never an obligation.

As for the example with the good samaritan shooter saving the woman from the bully with a gun, what if he had unknowingly interrupted some kinky S&M play by shooting the bully dead and subjecting himself to tort by the woman who’s now left without a partner?

All well-intentioned dogooders would be well advised to be extremely carefeul when interfering with other people’s bodies and property without their consent. There is always some risk associated with the psychic return of helping another human being. Do your own risk/reward calculation and act accordingly.

Implied contracts would more appropriately refer to situations like a restaurant serving someone arsenic pizza. In this case it would be ridiculous for everyone to sign a contract as to what may or may not be expected to be served in a cheese pizza and the “no arsenic” clause would be simply implied.

14

Also look at it this way. The doctor who took the stranger to court claiming he is now owed a fee would be saying: “I believe this man, had he been conscious, would have been easily willing to pay me 10,000 dollars for me to help him. Therefore I believe he owes me 10,000.”

Now let us say the stranger was incapable of lying. Let us say the judge then asked him if that was true. Let us say the stranger therefore answer truthfuly that this was indeed true. But let us say the stranger then had something to add. He said: “While I would have been willing to pay 10,000 dollars to be treated, I believe I would have been able to haggle the price down to just 50 dollars had I been awake.”

We see that even if it is in fact the case the stranger had been willing to pay 10,000 dollars in a certain set of circumstances he may stil have a very good reason to feel hard done if the judge indeed orders that is the sum he must pay.

Assuming we are dealing with an environment where this blanket fee rule exists, it would be therefore extremely dangerous to pass out in the open. For example if your life was in danger whoever had saved you, would could have easily now owned your house and all your other property, after he made the case that had you been awake you would have surely agreed to trade all your property for your life.

We see this kind of procedure would be extremely disadvantageous for the one who has passed out. Potentially such people would be always forced to pay the maximum price for their treatment. Yet why should the patient be forced to accept the maximum price he would have stil opted for treatment at? Why is that any better than making the doctor accept the minimum price he would have stil offered treatment at?

To correct this injustice the judge would therefore have to indeed take into account the belief of the stranger that he would have been able to negotiate a better price for himself. We then enter into territory where the judge now has to speculate what price the two would have settled on had there actual negotiation taken place. It means this becomes all the more absurd as the judge is now trying to figure out something that nobody can possibly know.

So we return again to price controls. Whether we have a document listing the prices in advance I spoke of earlier, or if it is indeed let to the judges to play the soviet commissars for the fixing of prices for urgent medical treatment recieved when unscounscious ad hoc, it is the same thing. You have arbitrary prices.

And as soon as you have something that is so obviously rule by men (the price-fixers) we can no longer speak of law. You can not tell me that the law states “A doctor offering urgent medical treatment to an unscounscious person shall be owed 250 dollars by the recipient of his services.” That’s no law! That’s some arbitrary, positivist BS!

15

Depends on the price. But if we are talking about what is realistic then the best way for somebody who freely helped somebody out to gain something out of it would not be for them to claim they were now owed a fee, but to indicate they had been hoping for a reward.

I think from a utiliarian sense this mandatory fee as brought up by OP would serve to sow discord among people who actually we have a good reason to believe are on pretty good terms and therefore capable of working such things out. It complicates things where we otherwise actually have very little reason to expect conflict. I mean who wouldn’t give some guy who helped them out a generous reward if asked for? They’d be grateful, right? And also who the hell would ask somebody they helped when unscounscious for money? Who would sell being a hero for 250 dollars, if they really weren’t down on their luck? (Or if seeking out unscounscious people to offer urgent medical treatment wasn’t actually how they made their living.)

16

Whenever a person is incapacitated or incompetent, there is a presumptive order of proxy decision-makers who may make a decision on his or her behalf… basically, next-of-kin. In terms of saving someone’s life, I will offer the following considerations:

a) If it is an act of charity, that is, the life-saver has no intent to be recompensed, then he cannot be contradicting the will of the dying person precisely because that individual can neither consent to nor refuse any treatment. Thus, he at the least cannot be held liable for any truly life-saving function he performs, so long as it is not against the will of another decision-maker with precedence (i.e. next-of-kin), in which case, things get more complicated. If he errs, for example, by performing a medical technique incorrectly, then he can only be held liable for that portion of his actions which were errant… he cannot be held liable for the overall success or failure of the medical procedure (for example, if the individual survives but only in a vegetative state).

This argument is justified by what I call the humanistic principle: That everyone is entitled to give whatever support they want to anyone else, provided they do not do so over the objections of the recipient. Since we have posited the individual could not object, then he is “fair game” for any good Samaritan. In particular, the failed suicide attemptee may not receive damages from the person who comes along to medically rescue him and prevent his suicide attempt from reaching completion, so long as he was incapacitated at the time this medical assistance was provided. If he was capable and refused assistance but it was provided over his objections, then this would actually be a tort.

b) The question, then, is whether the person who gives aid to the incapacitated can do so with expectation of recompense. One argument that might be given as to why we should hope that the person who provides emergency medical assistance to an incapacitated person will be able to demand recompense is that, if things were not so arranged, then there would be a significant discoordination in the capital structure re. medical emergencies. That is, doctors and hospitals might decline to invest as much into emergency medicine precisely because they cannot expect recompense.

Leaving aside the moral question for the moment, I think the utilitarian answer here is actually flawed. In the vast, vast majority of emergency situations, the individual himself or herself is not incapacitated. Anyone who’s ever waited in the interminable line at an ER can attest to this fact. Second, even in those cases where the individual is incapacitated, it is usually the case that his or her spouse or other next-of-kin is available to make consent to payment. Thus, we are talking about a tiny sliver of cases where there is an incapacitated individual who has a life-threatening condition and whose next-of-kin or other proxy decision-maker is nowhere around. Of these, I would expect that most would make compensation on recovery out of sheer gratitude.

A few who are either very poor or perhaps very miserly might not be moved by pangs of conscience to make recompense. So, would the missing capital from collections on these individuals really make or break the whole system? I do not think it would and I think that investment and emergency care would proceed apace even if some individuals could not be later convinced to pay.

Returning to the moral question (which the utilitarian question does weakly have some bearing on), can the person who chooses to give a gift later demand recompense for that gift? Is there some kind of “understanding” that some gifts are not really gifts and, should you receive such a gift, you will have agreed to pay for it? I think the answer is, clearly, no. The only situation in which we might reconsider this answer is if it really were the case that the entire edifice of emergency medical care would come toppling down to oblivion should we not require recipients of emergency care to make payment. There is no such danger, a conclusion which we can reach from common sense and from observation of how medical systems operate in poorer parts of the world where payment for emergency care is frequently not made simply because the recipient is unable to make it.

Also, we can look to our own history - one of the primary producers of medical services prior to 100 years ago were religious institutions. What does church have to do with an Emergency Room? Well, to the extent that ER and other medical services are, in fact, charitable, it makes sense for an organization that specializes in the production of charity to provide them.

I can attest that the modern system is cruel and inhuman. Of course, medical procedures have to be paid for. But the production of medical services for those in need is also one of the key charitable impulses in society. There is no reason to suppose from the outset that voluntary charity could not close the gap and that it is the role of law to subsidize doctors in order to ensure production of medical services… something which is not the proper role of law, in any case. It is never the role of law to ensure that some sub-group of society is made absolutely secure - or even as secure as possible - in its business transactions.

Clayton -

17

That’s what we were generally taught in torts, that nonemergency medical care without consent is textbook malpractice. But then in contracts we read a case where a man threatened suicide, was forcibly held in a hospital for 48 hours while he remained conscious and protesting, and was afterwards required to pay for the hospital bills.

The reasoning was that because Defendant was not fully mentally competent and was rendered professional services that conferred a benefit upon him, the Court held that he was obligated to pay for those services under a theory of implied contract. Where one party unjustly benefits at the expense of another, unjust enrichment requires that the benefiting party make restitution.

This is the laundry list of how to determine whether someone is due resitution:

A person is entitled to restitution acting without consent if:

  1. He acted with intent to charge AND

  2. Necessary to prevent the other from suffering serious harm or pain AND

  3. No reason to know that the other wouldn’t consent to them AND

  4. It was impossible for the other to give consent because of age or mental state

Of course, this all seems strange to me, which is why I started this thread. But I’m getting very used to these legal inconsistencies.

Right. Gifts are not revokable once they are accepted. I suppose the closest thing to this would be an option contract, which “meets the requirements for the formation of a contract and limits the promisor’s power to revoke an offer.” Basically a contract for a future contract. I’m not sure how you could argue that a doctor who was saving someone’s life on the street was acting with the intent to charge and not just from charity/gift. This goes back to the muddled mens rea question.

But like you said, this is such a rare and miniscule issue in the grand scheme of medicine, it just reinforces my belief that doctors should not be allowed to require payment–I believe they would receive compensation in other ways, if not voluntarily provided by the patient themself.

This is a good one, going in the quote bank. But how would you succinctly reply if someone simply asked, “why not?”

18

This seems extraordinarily speculative and presumptive. Not that it couldn’t be simulated with some degree of accuracy, but the idea of it seems to contradict the voluntary principle of a transaction in the first place.

It should seem that way because we are no longer talking about transactions. :stuck_out_tongue: If the two parties could simply have drawn up a contract before hand (“if you see me dying on the street, I will pay you to save my life”), we would have no need for a judge to get involved here. But the unfortunate truth of the matter is that they couldn’t have due to high transaction costs.

Court rooms are not markets. Unlike markets, there are winners AND losers in a court battle. And that should make sense. If there were clear and easy ways for both plantiff and defendant to come to some mutually advantageous solution, they would not be in court. This why we want to think very hard about how we want judges to making rulings.

This seems to foray into utilitarianism.

Absolutely. What I am talking about is judges making decisions that maximize social welfare (what Posner calls “wealth” in his textbook on the economic analysis of the law). I know people on this board dislike that notion, but I have to agree with David Friedman who concludes that there is simply no better place to start for making these kinds of decisions. Here he is in “Machinery of Freedom.”

We wish to know what the laws of a society–statist or anarchist–ought to be. The obvious way to find out is to start with general principles of justice and see what laws are necessary to implement them. In an earlier chapter, I argued that that cannot be done; libertarian principles of justice cannot, at least as they now exist, answer the relevant questions. They provide no way of deciding what ought to be included in property rights, how they may legitimately be defended, or how violations ought to be punished…

My solution is to find a different starting point from which to solve the problem. That starting point is utilitarianism. As a moral philosopher I am a libertarian, insofar as I am anything. As an economist I am a utilitarian.

http://www.daviddfriedman.com/Libertarian/Machinery_of_Freedom/MofF_Chapter%2043.html

If you disagree, what alternative exists for how rulings should be made in these circumstances?.

19

For me, it’s true by definition: the role of law is to resolve a dispute. Securing contracts is actually a separate question - this can be done by creating a performance bond (and then taking the dispute to law, if needed to establish the violating party’s liability) or by placing property in escrow, etc. The law merely answers the question “who was in the right? who acted justifiably and who acted unjustifiably?” and nothing more. Of course, government law administered through government courts mixes the compulsion of government into every step of the process, thus perverting it and muddying the true purpose of law. Law, today, is about equality; it’s about redistribution, it’s about security, it’s about protecting the environment, the weak, the needy, the disabled, and on and on. But this is all an illusion created by the interfering involvement of the State. The law is not about any of these things, it’s about dispute-resolution and, thus, answering the question of whether a specific action was justifiable or not.

Clayton -

20

Well said.

So to combat a commonly raised issue demonstrating the ‘necessity’ of courts interfering into the market—the ol’ Ford Pinto products liability case–how would you argue that Ford was justified in selling its products as they did?