Posted by Paul Rumley, Lead Partner, Business Development
Proposed fixed costs for clinical negligence claims: is it still about clients?
You may be aware of the recent proposal – to be subject to some form of consultation in the autumn – to have fixed costs for clinical negligence claims of a value possibly up to £250,000. The plan is to reduce the cost of clinical negligence claims to the NHS – but what are the wider implications of this proposal?
Is there a problem? If so, what is it?
It is estimated that the cost of medical negligence claims, including compensation and lawyers’ costs have now increased to £1.2 billion. From the Government’s publicly-stated perspective, that is money that could be better spent upon patient care in a cash-strapped NHS.
The Government also points to the legal costs of claimants being significantly higher than those of defendant NHS Trusts, and that in some claims more money is paid to the lawyers in costs than to the patient in compensation.
The “law of unintended consequences” has certainly produced a higher number of clinical negligence claims being notified to the NHS Litigation Authority (NHSLA). This is because the funding reforms introduced for personal injury claims have resulted in non-specialist personal injury lawyers turning to clinical negligence work for an alternative source of cases and therefore income. It has long been accepted that non-specialist clinical negligence lawyers working on cases,will result in unmeritorious cases being pursued and an inefficient approach to cases resulting in increased costs.
What are the real issues?
Only claims which are successfully pursued against the NHS, i.e. where it is proven that someone has been injured or died as a result of medical negligence, will lead to both compensation and legal costs being paid. It is a fundamental principle of English law that if someone is injured as a result of the negligence of someone else – and that includes the State-funded NHS – that person and/or their family are entitled to compensation to put them back in the position they would have been but for the injuries caused by the negligence.
Introducing fixed costs for clinical negligence cases, and at such a potentially high level of compensation, is clearly designed to deter people from claiming and therefore reduce the claims being made against the NHS. If you listen carefully to the Government, that is a good thing because less money is being taken away from the NHS which could be used upon care – however, this is a direct abuse of power by the Government to insulate themselves from claims. Is that really what we want in a taxpayer-funded system in which accountability should be more important?
In simple terms, a fixed fee scheme is the wrong focus: the focus of the NHS needs to be upon reducing negligence in the system because no medical negligence = no medical negligence claims.
Even more important is the fact that a reduced number of claims represents lost learning opportunities – to make the NHS system better for the future, and to make sure that future patients are not injured through repeated acts of negligence. Indeed, the level of compensation of claims targeted will result in loss of the most valuable learning opportunities, e.g. claims where people have died tend to be low value, high legal costs claims but are of most value to the NHS in terms of learning lessons and preventing tragedies from happening again in the future.
It is widely accepted that the Francis report detailing the scandal at Mid Staffordshire Hospital in terms of the care provided to vulnerable patients was something which needed to be revealed. However, the costs of that enquiry would not have been justified by the value of any claims which resulted from its findings. This is a very valuable illustration of how we will miss real injustices and/or opportunities to learn large and valuable lessons if justice in terms of medical negligence claims is reduced to the base values of how much a claim is worth and how much it costs to bring it. The value of a case is not always proportionate to its complexity, but that does not mean it is not important.
While a total bill of £1.2 billion to the cost of clinical negligence claims and legal costs may seem high, that needs to be put into a correct context; when compared against the taxpayer funded NHS budget of £115 billion per year, it can be seen that the total costs bill is in fact less than 1% of the annual budget, which is a very low claims ratio by any industry standard.
The costs of defendant solicitors advising NHS Trusts is not a direct comparator to those of patients’ lawyers. The costs of defendant firms are negotiated to a level insufficient to sustain a private practice legal firm on their own by the NHSLA. In addition, defendant hospitals usually involve solicitors in fewer claims at a later stage as they have sufficient experience to manage claims to a certain point, whereas an injured patient, having no experience of this legal system, needs a solicitor from the outset of the case so costs will be higher as a result.
Are there other ways of reducing the costs of claims?
The Government has recently introduced a “duty of candour” – a requirement upon clinicians to reveal willingly when things have gone wrong and to apologise for those – and the impact of that in terms of streamlining the medical negligence claims system has not yet taken full effect.
The costs reforms commenced in April 2013 for all litigation, including medical negligence claims, which are designed to control costs have not yet fully worked through: it may well be that this is sufficient to control the effects of litigation on its own.
Following on from the above, the Government has not addressed how its own NHS Litigation Authority (who manage all claims against NHS Trusts) contributes to increased legal costs by unreasonable approaches to claims, such as resisting payments on account of damages in claims where liability has already been admitted thereby necessitating expensive Court applications (an estimated increase in costs of £20,000 in one of our own cases) and by not settling cases quickly enough (an estimated increase in costs of approximately £150,000 in one of our own cases). If the effects of this are multiplied across the number of claims currently outstanding, it can be seen that the Government has much to address itself before it turns its attention to the costs of claimant’s lawyers.
The current Government seems intent on introducing a fixed costs regime for clinical negligence cases. However, the basis for doing so involves a disingenuous approach to the real issues in respect of the claims the taxpayer-funded NHS faces, is a deliberate attempt by the Government to insulate themselves from negligence claims and takes the focus away from the real issue of why there are so many medical negligence claims against the NHS and how that, and the learning opportunities which claims present, should be dealt with in terms of how the taxpayer-funded NHS is run and governed.
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