Court Clarifies When Doctors Can Sue for Interference with Hospital Privileges

H signPhysicians in Ontario are typically not employees of the hospitals at which they work, but are instead appointed to the medical staff on an annual basis and granted privileges to admit patients to the hospital and utilize hospital resources, pursuant to the Public Hospitals Act (“PHA”).  Physicians aggrieved by a decision of the hospital administration to suspend, revoke or interfere with the exercise of their hospital privileges can pursue remedies under the PHA or, in certain circumstances, through a civil action.

The case of Kadiri v. Southlake Regional Health Centre, 2015 ONSC 621, a decision of the Ontario Superior Court of Justice from earlier this year, shed some light on the interaction between the two separate routes by which physicians may seek to pursue a remedy for the unlawful interference with their hospital privileges.

The case involved an action by Dr. Kadiri, an anaesthesiologist with hospital privileges at Southlake Regional Health Centre (“Southlake”), against Southlake and a number of its physicians (collectively, the “Defendants”) for $3.6 million in damages (the “Action”).  In the Action, Dr. Kadiri claimed that the Defendants’ deliberate actions and omissions over a period of nearly three years affected his ability to exercise his hospital privileges and earn an income, and damaged his professional reputation.

Facts of the Case

The events leading to the Action arose following an incident that occurred on April 11, 2008, in which Dr. Kadiri suddenly left the operating room (“OR”) without warning or explanation and another anesthetist was urgently called in to assist the patient to safely come out of sedation (the “Incident”).  The Incident was later explained to be the result of a medical condition affecting Dr. Kadiri.

Following the Incident, Dr. Merrow, Southlake’s Chief of Staff and Chair of the Medical Advisory Committee (MAC), commenced an investigation.  Dr. Kadiri voluntarily agreed to take time away from the OR and his on-call duties pending completion of the investigation, but continued to work full time at the Anesthetic Assessment Clinic (“AAC”) and to perform pre-anesthetic patient evaluations.

On April 30, 2008, Dr. Merrow sent a copy of the investigation report (the “Report”) to Dr. Kadiri and requested that he extend his voluntary leave until Dr. Merrow could meet with the investigator and the Hospital CEO to determine whether further action would be taken in respect of the incident.  Dr. Merrow subsequently held a meeting of the sub-committee of the MAC on May 6, 2008 without the Hospital CEO.  The sub-committee reviewed the Report and agreed that it would recommend to the MAC that the Incident  be considered a lapse in judgment and that Dr. Kadiri’s agreement not to provide services in the OR, birthing unit, or on call should continue.

At a meeting on May 12, 2008, the MAC considered the incident and recommended that Dr. Kadiri be referred for a medical and psychological assessment.  Following the MAC’s review of the first medical report on May 23, 2008, Dr. Kadiri was advised by Dr. Merrow and Southlake’s lawyer that he had to submit to another assessment and if he did not cooperate and agree to remain out of the OR and refrain from on-call duties, his privileges would be suspended.  In Dr. Kadiri’s view, this was an illegal threat with which he had no choice but to comply if he wanted to continue to be able to support his family.  Dr. Kadiri’s lawyer sent three letters to Southlake between May and June 2008 advising that Dr. Kadiri had concerns about the procedural fairness of the process and put Southlake on notice of a potential claim for loss of income.

The assessment process was prolonged for a variety of reasons and it wasn’t until June 15, 2009 that the MAC met to consider the results.  As the content of two assessments conducted prior to this meeting differed drastically, the MAC recommended that a third assessment be conducted.  Dr. Kadiri’s lawyer wrote to Southlake again on June 24, 2009, advising that although Dr. Kadiri did not object to this assessment, his absence from OR duties and relegation to work in the AAC was not voluntary.  The final assessment involved another lengthy period of preparation, and over a year passed before the MAC considered the results on July 20, 2010.  The MAC recommended that Dr. Kadiri receive a written reprimand, but that he be reintegrated into practice following a period of clinical retraining, subject to a probationary period of observation on his return.  Dr. Kadiri finally returned to full practice in January 2011.

In April 2012, well after his return to full time practice at Southlake, Dr. Kadiri commenced the Action. The Defendants then brought a motion for summary judgment to have the Action dismissed on the grounds that: (a) the limitation period had expired; or (b) Dr. Kadiri had not exhausted the statutory appeal process available to him under the PHA.  Specifically, the defendants argued that Dr. Kadiri knew all of the material facts, the identity of the parties alleged to have caused him harm and the damages he had suffered by April/May 2008, but did not issue his claim until 2012.  They further claimed, in the alternative, that Dr. Kadiri’s matter had to be reviewed by the Health Professions Appeal and Review Board (“HPARB”) before any damages claim could be pursued in civil court.

rosensunshine_image_healthlaw_1The Summary Judgment Motion

The Defendants’ summary judgment motion was heard by Justice Gilmore and dismissed for the reasons set out below[1]. We will first review the arguments related to the PHA, and will then review the limitation period argument.



Appeal to HPARB

The Defendants argued that the Action should be dismissed because Dr. Kadiri was required to exhaust the process under the PHA by seeking to have HPARB hold a hearing regarding the alleged wrongful restriction of his privileges, before he could make commence a civil proceeding for damages.

The PHA governs the relationship between physicians and hospitals, and sets out a detailed process for granting, renewing, suspending, restricting and revoking appointments and privileges, as well a process for resolving disputes related to these issues.  Pursuant to the PHA, where a physician disagrees with a decision made under the hospital by-laws cancelling, suspending or substantially altering his or her privileges, he or she can appeal that decision to HPARB.  The Defendants relied on the Ontario Court of Appeal decision in Beiko v. Hotel Dieu Hospital St. Catharines, 2007 ONCA 860 (“Beiko”), which held the PHA provides a comprehensive code for dealing with the issues of hospital privileges and, therefore, before a physician can commence a civil action for damages suffered as a result of a privileges dispute, the physician must exhaust the statutory route for redress under the PHA.

In considering this argument, Justice Gilmore questioned what decision Dr. Kadiri could have appealed to HPARB, given that the privileges dispute was ultimately decided in his favour, in that he was permitted to return to his full-time work.  Furthermore, Gilmore J. found that no decision was ever made respecting Dr. Kadiri’s privileges under the hospital by-laws, nor was there any “de facto” decision to restrict or limit Dr. Kadiri’s privileges, which could have brought the matter under HPARB’s jurisdiction.  Dr. Kadiri’s privileges as a whole had not been suspended during the MAC process (he continued his work in the AAC) and his privileges had been renewed by the board twice during the relevant timeframe.  Accordingly, there was therefore no statutory basis upon which Dr. Kadiri could seek an appeal to HPARB.

Limitation Period

Justice Gilmore accepted the Defendants’ argument that pursuant to the Limitations Act, 2002, there was a two-year limitation period which applied to Dr. Kadiri’s claims against the Defendants.  She found, however, that the limitations period began to run only once Dr. Kadiri knew that a legal proceeding would be an “appropriate” means to pursue a remedy for the loss he claims to have suffered.  “Appropriate” in this context meant “legally appropriate.” Since Beiko stood for the proposition that a doctor contesting interference with the exercise of his hospital privileges must proceed by way of the statutory appeal route before commencing an action in damages, it was therefore not legally appropriate for Dr. Kadiri to bring a tort claim against Southlake until he had first proceeded under the PHA. Accordingly, the limitation period did not start running until Dr. Kadiri had completed his appeal proceedings pursuant to the PHA, which were not concluded until either January 2011, when Dr. Kadiri had resumed his duties, or July 2010, when the MAC recommended that he be permitted to return to his former duties following a period of retraining.  In either case, Dr. Kadiri filed his statement of claim within the two-year limitation period.

The Action

As Dr. Kadiri was partially successful on the summary judgment motion, the Action remains alive. However, before Dr. Kadiri will be entitled to obtain compensation from Southlake for lost income or other damages claimed, he must still prove his claims at trial.

We will continue to monitor this case with interest.


[1] Note: While Gilmore J. dismissed the bulk of the Defendants’ motion, she also dismissed the claims Dr. Kadiri made against two of the physicians individually, finding that they were not commenced within the requisite two year limitation period.  For the sake of brevity, this part of the analysis will not be addressed in this case summary.

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