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The strategy of a Fixed Recoverable Costs regime is to reduce the cost of clinical negligence claims to the NHS. Here Hannah Carr considers what impact the current proposals will have on “access to justice”
It has often been asserted that clinical negligence claims are usually lengthy and often adversarial resulting in increased legal costs. Arguably, this is not in the interests of the patient; healthcare professional; or indeed the tax payer.
The Department of Health (DoH) said awards of between £1,000 and £25,000 – around 60% of all claims settled by the NHS – encompassed the greatest disproportionality between Claimant legal costs and damages (compensation), with Claimant recoverable legal costs representing 220% of the damages awarded.
However, it is worth making the point that Claimant legal costs are inevitably higher than Defendant costs because it is the Claimant who carries the burden of proving their claim. Claimants have to pay for medical records, expert opinions and ever increasing Court fees etc. Defendants, on the other hand, have access to in-house medical and legal expertise, the cost of which is not taken into account when reporting on Claimant and Defendant legal costs gaps.
The DoH estimates that a regime applying to clinical negligence claims with a value below £25,000 would “release a saving of approximately £45m per annum by 2020/21”.
This begs the question: how is such a proposed saving achievable?
It is proposed that a Fixed Recoverable Costs (FCR) Regime would apply to:
The DoH has put forward four possible methodologies to sit behind the fees:
Where there are two or more potential Claimants, the intention is that the regime will apply in relation to each Claimant.
Whilst the Court may entertain an amount of costs greater than the Fixed Recoverable Costs, it will do so only if it considers that there are exceptional circumstances and the additional costs increase the amount by 20% or more.
Experts’ fees, Trial costs and the costs of approving settlements are dealt with separately.
The consultation has received a mixed response. While some Claimant Lawyers have welcomed the £25,000 limit, others have complained that the consultation should not conclude until after the National Audit Office has completed its review of how the NHS manages clinical negligence cases and their costs, as well as Lord Justice Jackson’s review of Fixed Recoverable Costs; and the Ministry of Justice’s review of the effect of the LASPO reforms.
Law Society president Robert Bourns has stated “ draft plans could see harmed patients denied the correct level of compensation unless the proposed regime excludes complex cases and includes exemptions for unusual circumstances .”
In my opinion, there will be some cases that are simply not suitable for Fixed Recoverable Costs and failing to pursue them will likely lead to injustice. At the very least, exemptions must be carefully considered and applied to cases that are particularly complex, or those that involve still-birth and bereavement.
It must be acknowledged by all stakeholders to the consultation that the level of damages is not necessarily an indicator of the complexity of the matter. Factual and legal complexities need not be proportional to the damages claimed.
So far as bereavement damages are concerned, if exemptions are not applied then there will be a restriction upon the ability of families who have lost a loved one to pursue a claim.
There will be some benefits to a Fixed Recoverable Costs regime:
However, the proposals for the Fixed Recoverable Costs regime do not, of themselves, suggest that cases will be resolved more rapidly.
Potential problems with the proposed regime could include:
Although a Fixed Recoverable Costs regime limits the amount of costs that may be recovered by a Claimant from the Defendant, Lawyers could charge their clients “top up” fees. However in a system where clients have to pay the success fee and the non-recoverable element of their after-the-event legal expenses insurance out of their compensation, this is arguably undesirable on many levels.
If a regime is introduced, exemptions should also include:
The Government has not addressed how the NHS Litigation Authority contributes to increased legal costs by unreasonable approaches to claims, such as resisting payments on account of damages where liability has already been admitted or continuing to use the ‘ deny, defend and delay’ approach, increasing the costs incurred by the Claimant’s Lawyers.
Last year, a major NHS inquiry found that hospitals are failing to investigate far too many deaths and frequently ignore the concerns of bereaved relatives. A year later the Care Quality Commission (CQC) carried out its own review.
This review looked at the processes and systems hospital trusts use to identify, investigate and learn from the deaths of people in NHS care. According to the CQC the ‘system-wide problem’ means that hospitals are not learning from their mistakes. The CQC goes on to explain that “ learning from deaths needs to be a much greater priority for all working within health and social care. Without significant change at local and national levels, opportunities to improve care for future patients will continue to be missed ”.
Would it not be better to look to reduce the number of mistakes in hospitals, by providing better training, adequate staffing levels and robust procedures? Notwithstanding the potential to save lives, this would surely result in a reduction in claims levels; damages and costs paid?
In the context of an NHS where previous CQC and Government reports have identified pervasive failures to learn from patient safety incidents, it is imperative that individuals and their families have access to justice; that the NHS can learn lessons and improve patient safety; and so that individuals are properly compensated.
Whilst I agree in principle that there must be a better way of dealing with lower value clinical negligence claims, one size does not fit all. Clinical negligence claims are usually complex. Defendants can be slow to investigate and admit their failures – increasing costs on both sides; and the courts are too busy.
If a Fixed Recoverable Costs regime is to be implemented for claims which settle at below £25,000 then it must make relevant exemptions as outlined above.
The consultation is due to last for a period of 12 weeks, closing on 1 May 2017. Responses are key and so I would strongly urge you to consider and respond to the consultation at: https://www.gov.uk/government/consultations/fixed-recoverable-costs-for-clinical-negligence-claims
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