Government unveils clinical negligence fixed costs plans

Health secretary Jeremy Hunt has finally announced details of the fixed costs regime for clinical negligence cases. Speaking about the plans Mr Hunt announced that there would be a 12-week consultation to discuss the issue and to also address the wider issues affecting clinical negligence litigation; issues like the use of experts and Civil Procedure Rules.

Launching the consultation Mr Hunt said that although the government’s plans were not intended to affect a claimant’s entitlement to compensation or overall amount of damages awarded, it was clear that action needed to be taken:

‘It’s important that when significant mistakes happen in the NHS, patients are able to have an open dialogue with a trust about what went wrong, receive reassurance of what is being learnt, and can discuss what form of recompense or redress may be appropriate. Legal action should only be part of this process.

‘Unfortunately, what we often see in lower cost claims is a deeply unfair system where unscrupulous law firms cream off excessive legal costs that dwarf the actual damages recovered. We believe this creates an adversarial culture of litigation, which is inflating insurance premiums and drawing away resource from the NHS at a crucial time.’

The consultation document states that the total cost of clinical negligence against the NHS in England rose from £1.2bn in 2014/15 to £1.5bn in 2015/16. It also states that in claims between £1,000 and £25,000, more than 60 percent of the total expenditure on clinical negligence in 2015/16 was recoverable claimant costs and 220 percent of the damages awarded.

So what proposals are suggested in the consultation document? Well, a number of options for the level of fees have been suggested. One proposal sets costs for claims at pre-issue at £3,000, rising to £7,150 for claims that are post-listing. (Trial fees are in addition to the figures and a 10 percent reduction is proposed for early admission of liability) Another suggestion involves adding a percentage of damages to fees, with costs for claims post-listing restricted to a maximum of £22,070 where damages are £25,000. Any costs for cases listed in London will receive a 12.5 percent weighting.

The government says it believes the costs for clinical negligence cases are excessive and often far exceed the value of the claims themselves. Lawyers question this belief and argue that defendants’ obstructive behaviour often escalate costs unnecessarily. They also argue that if fixed costs are introduced any claim with merit will be difficult to pursue.

What sort of reaction have the plans received? Well, Action against Medical Accidents (AvMA), a patient safety charity, has said it believes the government is wrong to press ahead with plans without waiting to see the evidence. The charity’s chief executive, Peter Walsh, said he believed the proposals could harm patient safety and restrict access to justice:

‘We are deeply disappointed that, against our advice, the department has pressed ahead with these proposals without even waiting to learn about the impact of earlier reforms which are reducing costs; what the NAO has to say about the role of the NHSLA; or what Lord Justice Jackson’s review has to say about fixed costs.’

‘The NHS Litigation Authority is also able to challenge costs where there is a case for doing so. In our experience, high costs are usually a result of the NHS not investigating incidents properly and dragging out claims with unreasonable denials of liability. However, it seems the department has taken no account at all of defendant behaviour unnecessary escalating costs,’ he added.

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