Hospital Liability for Actions of Independent Contractor Physicians

The classic vicarious liability claim goes something like this: The patient is referred to the local hospital, receives treatment from a physician who is not an employee of the hospital, and now that an adverse outcome has arisen from the treatment, the patient brings a claim against both the physician and the hospital. The foundation of the vicarious liability claim is that the hospital has held out the physician as having 'apparent authority' to act as an agent of the hospital, thereby inducing a reasonable reliance by the patient on that agency. With this year's publication of the new Restatement of the Law (Third) of Agency (2006), there may be subtle changes in store in some courts' inquiry into this aspect of liability assignment; therefore, review of the case law as it now stands and analysis of the change in the Restatement are in order.