One recurring issue for medical tourism businesses is to ensure that any dispute is resolved in an appropriate, pre-selected forum. Most medical tourism businesses - rightly -wish to avoid being sued in the United States. And short of avoiding U.S. patients altogether, the best way to do this is with an appropriate choice of law provision. But choice of law provisions are not foolproof; they can,
if they appear to be optional, or merely a preference, be ignored by a U.S. court. In a later series of posts, I will discuss the importance strongest possible choice of law provision into a medical tourism contract.

For now, however, I want to begin a review of the law of a number of popular medical tourism destinations for two reasons: first, if a choice of law provision ever comes under a serious challenge, a Court will need to understand what the alternative is and whether enforcing that choice of law provision will limit rights the Court believes local laws mean to preserve. Second, in the absence of a choice of law provision, a defendant seeking to remove a case from a U.S. court to a preferred forum will need to rely on a motion for forum non conveniens and show that the proposed venue provides an "adequate alternative forum" where a plaintiff can still have his dispute properly heard and compensated.

Although the principles of a motion for forum non conveniens are easily set out, a careful client will want to know that U.S. courts have, in fact, already opined on whether a forum legal system is indeed adequate.

New Zealand and the Accident Compensation Corporation

In 1974, New Zealand adopted a unique, publicly funded, national no-fault accident insurance system which provides medical and wage compensation for almost any kind of personal injury, including personal injury caused through medical malpractice. The awards are governed by a comprehensive regulatory mechanism and awarded through a straightforward administrative
process. The compensation is dramatically less than what might be available from a sympathetic U.S. jury. Compensation is limited, but all but guaranteed.

Only in the most wonton cases of deliberate injury is a private action in tort allowed in New Zealand courts. Short of that, a citizen of New Zealand's only choice is to file a claim with the ACC. There are still administrative reviews if a doctor is accused of malpractice -- professional charges that NZ physicians take very seriously -- but very little chance of being personally sued for a bad outcome. While a New Zealand hospital or physicians group might be able to arrange insurance to cover them against losses in a U.S. courtroom, it is far better to rely on a system which limits excessive awards and one for which they have already paid.

Despite the limited awards and administrative -- rather than judicial -- process, Courts have shown no hesitation in dismissing cases brought in the United States in favor of resolution under the New Zealand ACC.

In Lueck v. Sunstrand Corp, 236 F.3d 1137 (9th Cir. 2001), following a fatal commuter airline crash in New Zealand, a number of plaintiffs sued the manufacturer of the landing gear in the federal courts in Arizona. In upholding the lower court’s decision to grant the motion to dismiss for forum
non conveniens, the appeals court went through an ordinary analysis for determining whether to dismiss. Among other things, the court found that witnesses and evidence could be made available in New Zealand, that the courts in New Zealand were competent to handle the U.S. legal questions, and that defendants were willing to have their case adjudicated in New Zealand.

Still, to determine whether or not New Zealand’s compensation system was an “adequate alternative forum” even where the plaintiffs “candidly admitted that the impetus for the [U.S.] lawsuit [was] money” it was only necessary to establish that the forum “provide the plaintiff with some remedy for his wrong.” Id. At 1144-45. Indeed, it is only under “'rare circumstances . . . where the remedy provided by the alternative forum .. . is so clearly inadequate or unsatisfactory, that it is no remedy at all,' that this requirement is not met.'" Id.

In a U.S. District Court case in Alabama, a group of New Zealand women suing for injuries related to silicone breast implants had their claims dismissed from a federal court in Alabama in favor of resolution under the ACC despite the fact that he ACC is an administrative remedy rather than a judicial one. (In re Silicone Breast Implant Litigation, 887 F. Supp. 1469 (D. Ala. 1995).

In short, despite a very different form of remedy than that available in the United States, U.S. courts have repeatedly approved of New Zealand's system. If the other factors supporting a change of venue are there, the fact that New Zealand's system offers a far more limited compensation system will not prevent a U.S. court from dismissing a case in favor of it being heard in New Zealand and resolved under the ACC.