Fixed Costs in Clinical Negligence Claims – Yes or No?

In June 2015 Ben Gummer, Health Minister, announced that the Government was looking into implementing a fixed costs regime for clinical negligence cases with a value of up to £100,000. It was then announced in August 2015 that the Department of Health were considering whether or not to increase this limit to £250,000.

The justification behind the proposal was to reduce the amount paid out to Claimant lawyers for the costs of pursuing successful claims. Whilst the Department of Health predicted that £80m could be saved through a limit of £100,000, they estimated a further £25m would be saved by increasing the limit to £250,000. The scheme had a proposed implementation date of October 2016.

Since the announcement, there has been serious concerns raised by Claimant clinical negligence lawyers, and their representing bodies.

APIL highlighted a major conflict of interest in the proposals – “Given that the Department of Health is the negligent party when a Claimant pursues a successful clinical negligence claim, then it should not seek to fix costs or to set the level of fixed fees. If they are introduced, an independent body should assess fee and expert fee levels, to be reviewed annually”.

The Law Society in their response reminded the Government that “The full effects of LASPO are yet to work through the system in any substantive way, and the Department’s failure to take into account the impact of LASPO on recoverable costs is a fundamental flaw in the reasoning that has led to the conclusion that a new scheme of fixed costs should be introduced”.

The abolition from 01 April 2013 of the unsuccessful Defendant being responsible for payment of additional liabilities is yet to take full effect, and the Law Society warn that if “the Department of Health were to decide to press ahead with further methods to reduce legal costs, that would be seen as a telling implication that LASPO has not been effective in the way that the Government initially envisaged it”. The Government’s analysis and quantification of the savings that could be made if fixed costs were to be introduced has been based on pre-LASPO data which, of course, includes additional liabilities. The amount the Government claim could be saved by the implementation of fixing costs is therefore misleading. A further analysis should be made of the post LASPO costs.

There is serious concern that the implementation of the scheme will result in a reduction of clinical negligence lawyers being prepared to accept lower value clinical negligence claims. This will impact of the public’s access to justice. Considerable work is involved pre litigation in securing supportive breach of duty evidence, and it must be economical for a lawyer to undertake this work. Further, there has been no suggestion as to whether or not the proposal involves cases where liability has been admitted. Both the Law Society and APIL agree that, if implemented, the scheme should only apply to straightforward claims where liability is admitted in the pre litigation stage and where damages are less than £25,000.

It is also argued that expert’s should be prepared to accept the capped fees in order to share the effect of the Government policy. It is the Solicitors who, in the past, would absorb any difference, and the Department of Health is therefore encouraged to consult with medical expert groups on this issue.
Finally, it is stressed that the NSHLA must also adopt a cost saving approach. There is currently no incentive in the proposal for the Defendant to settle early. If the scheme is implemented for matters where liability is admitted within the Letter of Response, this would limit the Solicitors’ exposure to the Defendant’s conduct often resulting in increased costs.

On 19 November 2015 the Government announced a delay in publishing their consultation on the proposal, which was due that month, and advised that it would be published in early 2016 subject to committee clearances.

Claimant Solicitors are therefore left pondering what exactly will be proposed, and how will it impact upon their profession. Many wonder that if the NHS focused on addressing the cause of the negligence and improving patient safety then savings would be made from the heart of the problem, and hence less money paid out overall for clinical negligence claims.

If you have any questions or queries in relation this blog please contact Joanne Chase (joanne.chase@clarionsolicitors.com and 0113 336 3327) or the Clarion Costs Team on 0113 2460622.

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