The Centenary Speech- New South Wales Medical Defence Union


New South Wales Medical Defence Union, predecessor of Avant Mutual Group, has it origin in 1893. Avant is the oldest and largest medical indemnity company in Australia. Avant celebrated its 120 years anniversary last year. The Centenary Speech of New South Wales Medical Defence was delivered in August 1993 by the president, Dr Richard Tjiong. The full text is reproduced in full below and in two parts: Part I- The History of New South Wales Medical Defence, and Part II- The Challenge of the Future.

True to its centenary commitments, NSW Medical Defence Union embarked on a number of reform initiatives. The reforms that followed were not without some controversy; sections of the medical and the legal professions feel that their vested interests were compromised. One reform relates to the medical negligence law. In the last two decades of the 20th Century, Australia was rapidly following the US style of medical malpractice litigations which had started in the early seventies. The efforts of NSW Medical Defence continued over ten years before the laws in Australia received the first significance change in the form of the Health Care Liability Act in 2001 in NSW; this was followed by the Commonwealth Government’s push for uniformity throughout the nation and also by other Commonwealth initiatives in the provision of mandatory professional indemnity by way of regulated insurance for doctors and other healthcare professionals.

Dr Tjiong retired in November 2001 after an illness. Since then he has been pre-occupied with time-consuming family matters that in part are reflected in the article “A Family Feud and the Australian Legal System”.

The Centenary Speech

NSWMDU Centenary Celebration

Parliament House Dining Room

18 August 1993

Part I – The History of New South Wales Medical Defence

Mr Chairman, the Honourable Attorney General Mr. John Hannaford, Honoured Guests, Ladies and Gentlemen. Thank you, Mr Carson and friends of NSW Medical Defence, for your kind thoughts and best wishes.

One hundred years ago, in the same year when the fathers of our Commonwealth Constitution were deliberating on the future of this nation at the Corowa Federation Conference, a small group of medical men gathered at the Australia Hotel on the 12 April 1893 contemplating on the needs of the medical profession.

They called themselves the Sydney Medical Association, and charged an annual membership subscription of one guinea to establish a Defence Fund. The object was ‘to protect medical men against vexatious actions at law arising out of the practice of their profession.’ At the first Annual General Meeting held in April 1894, the name was changed to Sydney Medical Union, and membership numbered 88. By June that year, the name NSW Medical Union was adopted.

This was the humble beginning of what is now the largest and oldest Australian medical defence organisation. It was not until 1934 that the organisation was incorporated, and the name was changed to New South Wales Medical Defence Union Limited.

An Outline of the History of NSW Medical Defence

Although NSW Medical Defence has been in existence for 100 years, it could be said that it has come of age only relatively recently. The first 85 years were characterised by infrequent litigation and small subscription fees. The affairs of the Union were managed by Councillors, who were also administrators.

Ours was the only defence organisation in this state. In 1962, over 90% of the medical profession in NSW would have been members of the NSW Medical Defence Union. This was the year of the inauguration of the Australian Medical Association and the AMA did have similarly high level of support from the profession.

Medical litigation increase in the early eighties produced profound changes within the organisation. Defence costs escalated. Reinsurers became disenchanted with their shares of payouts. Subscriptions from members had to rise correspondingly.

In 1976, Council of NSW Medical Defence complied with the requirements of the newly introduced federal Insurance Act by acquiring an insurance licence. This licence placed the Union’s finances and operations under the regulatory control of the Insurance and Superannuation Commission. All other medical defence organisations [operating in Australia] avoided the Insurance Act by characterising themselves as discretionary mutual funds.

The London-based Medical Defence Union set up a secretariat in Sydney in 1979. With no experience in membership recruitment, NSW Medical Defence started losing members. Council inevitably reacted by matching the lower subscription rates charged by the competitor.

Inadequate funding and difficulties with reinsurers in the early eighties led the Union’s finances into a downward spiral. By late 1982, the organisation was forced to change its Articles of Association and became a discretionary mutual association. It relinquished its insurance licence in the following year.

It took the subsequent four years before prudent funding by adequate subscriptions was achieved; and another three years before we regained our insurance licence. This time round, Council adopted the strategy by reposing the licence in a wholly owned subsidiary company, Australasian Medical Insurance Limited with the acronym AMIL, in early 1989.

With its finances in good order, and with insurance licence regained in AMIL, the status of NSW Medical Defence in the insurance industry was restored. The group now have in excess of 25 Australian and overseas insurance partners in the form of reinsurers. AMIL takes the lead retention. The success of the last eight years could not have been sustained without a professional administrative infra-structure. There is now a developing culture of synergy within the organisation between the Council and the Administration, a synergism we extend to external agencies from lawyers to various professional advisors, from Jardine our brokers to reinsurers.

We feel ready to meet the challenge of the next century. Before we venture into the new era, it would be remiss of me not to mention some of the men and women who have illustriously served the organisation.

Our early record indicates that A Dr S. Jones chaired the inaugural meeting in April 1893. It appears, however, that the first president was Dr Frederick Quaife. He was also a foundation branch councillor of the British Medical Association in 1880, and served as BMA Branch President in 1884-85.

Dr Quaife served as President of NSW Medical Union for 21 years, and was succeeded by Dr Thomas Fiaschi. Dr Fiaschi was a surgeon at Sydney Hospital for many years. He was held in awe by his patients. There are many stories about the fine doctor, one was that he never raised the matter of payment with his patients. It was understood that a patient, on departure, was expected to simply deposit one guinea in a box placed inside the door of his surgery!

The monument outside Sydney Hospital, il porchillino, the little pig, was spotted in a market in Florence by Dr Fiaschi’s sister, Marchesa Clarrissa Porri Gianni. She waited 7 years before she could buy the monument. When she did, she brought it to Sydney at the age of 82, and presented it to Sydney Hospital in memory of her father and her brother, Pierro, who was also a surgeon at Sydney Hospital. She had the idea that it could be used for fund raising for the hospital.

Dr Fiaschi served for 12 years. There followed a succession of four presidents, from Dr. S. MacCulloch, Dr. Alfred Campbell, Dr. Clarence Read and Sir Benjamin Edye, before Dr Stanley Lovell took over in 1958.

Dr. Lovell was the longest serving president. He had to face the turbulent and rapid changes in the affairs of the organisation. He died in office in 1985 after serving for 27 years. We are honoured tonight by the presence of his widow Mrs. Helen Lovell.

Reforms came during the time of Dr. Gordon Clowes as President. The push for insurance industry standard cold not have been realised without Dr. Clowes’ leadership.

Of all the secretaries, I would like to mention Dr. Ronald Hunter who gave the organisation 21 years of faithful service on little or no remuneration. To many members including myself, he was the face of the Union. He was succeeded by Mrs. Dorothy Crilley, who witnessed the turmoil of the eighties and saw the beginning of reform. She died in office in 1989.

I must mention an outstanding past Senior Vice President, Dr James Michael L’Estrange, who is sadly missed. Dr. L’Estrange was a caring Councillor, who served as Claims Committee Chairman from 1980 to 1990. He was forever supportive of the members in trouble. He was the fiduciary of all fiduciaries. Had he survived, it would have been most likely that this Centenary Dinner Speech would have been delivered by him. The organisation owed a great debt of gratitude to Dr. L’Estrange for his dedication and contribution.

Last but not least, I would like to mention some past Councillors who are here with us tonight: Dr. Munro Alexander, Dr. Edward Booth, Dr. Volney Bulteau, Dr. Anthony Eyers, Dr. Eric Goulston, Dr. Edward Morgan, Dr. Frank Pigott, and Dr. John Windeyer. May I ask these Past Councillors to rise. Please join me in acknowledging their presence and contributions by acclamation.

A special mention needs to be made of Dr. Munro Alexander and Dr. Volney Bulteau, who, aside from their distinguished service as Councillors, have studiously collated the history of NSW Medical Defence. It is their work that has enabled me to prepare the history section of this paper. Thank you, Dr. Alexander and Dr. Bulteau.

Mention has been made of the longstanding relationship NSW Medical Defence has enjoyed with Blake Dawson Waldron. I would like to mention that Coopers & Lybrand have provided accounting and auditing services since the forties. And Jardine has been our brokers since 1985. These have contributed significantly to the success of recent reforms within the organisation.

Part II- The Challenge of the Future

Stated simply and at its broadest, the challenge of the future is to do our part to make Australia a better place in which to live.  So what is our part in this challenge?  Three areas come to mind.  The first is law reform, the second medical indemnity reform, and the third is the unification of the medical profession.

Law Reform

Reform in the area of negligence appears to be the most pressing.  This is very much in the portfolio of our Guest of Honour [Attorney General Mr Peter Hannaford].  Tort reform was recently addressed by the State Government and draft legislation was proposed.  As there is a need to continue this process, we would like to see it again at the forefront of the Government’s agenda.

The escalation of claims against medical practitioners and other professionals in the last two decades is reminiscent of the explosion of negligence law in the wake of the industrial revolution in England in the 19th century.  There was a public outcry then for accountability and for compensation.

The post war era has similarly seen a technological revolution, not the least of which is in medicine.  One insidious problem in the development of the law of negligence of recent years is the strive by sections of the judiciary to use negligence law only as a vehicle of compensation rather than accountability, thereby blurring the distinction between malpractice and mishaps.

This view espouses that, as a result of technological development, mishaps and some mistakes are inevitable in medical activities of increasing complexity.  The injured patients, if uncompensated, would be left to support themselves through a welfare system, which is considered by some justices to be inadequate.  These judges perceive that if compensation is expanded, the medical profession is better able to distribute its loss through insurance, and further spread the cost to the public through patients’ fees.

This view expounds that a medical malpractice ‘explosion’ such as has occurred in the United States should not be seen as necessarily undesirable.  It is but a society’s way of distributing the loss suffered by its injured citizens.

There are many flaws in this view.  To start with, there is no comparison between the adequacy of our welfare system and that of the Americans.  Secondly, the medical fee structure under the constraints of Medicare system is not capable of distributing the burgeoning costs of malpractice insurance.

Lastly, an expanded negligence law that does not distinguish malpractice from mishaps has several undesirable consequences.  The mitigation of fault would remove the very element of accountability and the reform that should follow a negligent event.  There is a view of some merit that the Auckland Hospital disaster involving cervical cancers would not have occurred had New Zealand retained a fault-based compensation law.

There is the inevitable and undeserved loss of confidence by the patients and the public at large in the medical profession; the public perceives the defendant doctor who loses a negligent suit as having been judged as being a negligent doctor, not just simply a spreader of cost.  The profession would react by practising defensive medicine.  The crisis faced by rural obstetric patients is but one example.

These consequences are not in the interests of the Australian public.  If there be a need to expand compensation, let this be done by other means such as reforming our welfare system or by introducing a limited no-fault government-funded scheme.  I understand that the Tito Inquiry is presently examining this issue in relation to birthing injuries.

Other areas of law that require the continuing scrutiny by the medical profession include legislation relating to medical practice, the complaints unit, and the adversarial system of law.

Malpractice Indemnity Scheme in Australia

Our second challenge is to improve the malpractice indemnity industry in Australia.  The Tito Inquiry is presently looking at recommending reforms in this area.

The Council of NSW Medical Defence believes that it is not in the interests of the Australian public that so-called discretionary defence organisations should escape the regulatory control imposed on all insurance companies.  In the absence of prudential control, the interests of the members and the end beneficiaries, the public, are left unprotected.

NSW Medical Defence has taken the lead by taking on the insurance licence through AMIL.  Furthermore, Council believes that the interests of Australian doctors would be better served by one national Australian indemnity body, rather than the current ten diverse organisations.

A national body is preferably achieved by co-operation with existing sister defence societies in the other States.  As the largest of all state-based Australian defence organisations, we have a lead role to play.

Council recognises the need to remove the apparent geographic limitation that comes with our existing name.  We anticipate that a change of name will be submitted to members before the end of the centenary year.

Toward a More United Medical Profession

Our third challenge is to unify the profession.

One of the most conspicuous weaknesses of the medical profession is our lack of cohesion.  There is not a centre or umbrella body that is the equivalent of the Law Society or the Bar Association.  These organisations are responsible for the issuing of practising certificates for their members; they conduct continuing education; and they discipline their members.  The Law Society even provides malpractice insurance for their members.

As against the legal profession, the organisation of the medical profession stands in stark contrast.  We have various political and industrial associations, some existing in duplication.  A number of Colleges exist independently of one another.  A Committee of the Presidents of the Colleges has been set up in recent years.  This Committee is working well toward a unified approach to common educational issues.

However, there is a spectrum of other issues facing the profession, most of which would be better approached with a common voice.  A divided profession risks the loss of self-control.  These issues would then fall prey to authorities outside the profession.  This has already occurred in a number of areas.

We have a common cause and a common destiny.  Men and women of high education should have sufficient good will to work in unity, despite the diversity of our specialisations.


From a humble beginning of 88 members to the present number in excess of 10,500, from gross assets of £76.5.8 to the present $60 million, NSW Medical Defence has come a long way in 100 years.

We have gone from an organisation totally managed by Councillors to a corporation with a Board of Governors working synergistically with a professional Administration. We have taken the lead in the medical indemnity industry by recognising an insurance industry standard of management and by taking on the insurance licence in AMIL.

We have survived the Australian medical malpractice explosion of the eighties, and recognised the clear message from the wider community: the medical profession needs to be more self-accountable. Our finances are arguably unmatched by any other defence organisation operating in Australia.

We have a vision and a plan for the future. This is the time to remind ourselves of the prime object of our existence. Whatever insurance business we may take on in our head, our heart is still very much in medicine. The organisation belongs to members of an ancient and noble profession. The problems presently facing our members are more complex and distressing than those of 100 years ago. Assisting our members is assisting the very people they serve- the community at large.

It has been said that the world ought to be a better place because a man has lived. May Australia be a better community because NSW Medical Defence lives on. With this high expectation, we look forward to the second one hundred years of achievements.

Thank you, ladies and gentlemen.

Richard Tjiong


New South Wales Medical Defence Union.

Further reading:
Dr Richard Tjiong – Medical Indemnity Industry in Australia