Department of Health proposals to introduce fixed recoverable costs for clinical negligence cases

On 2nd May 2017 the Department of Health (DoH) closed its consultation on a proposal to introduce fixed recoverable costs (FRCs) for clinical negligence claims. It is still evaluating the responses it received and it is not yet clear when the results of the consultation will be published.

What was the consultation about?

Initially the DoH raised the idea of FRCs for clinical negligence claims in August 2015. At that time, the proposal was that FRCs would apply to all claims worth up to £100,000 and the DoH ran a consultation to consider extending that upper limit to £250,000. The intention was to introduce the scheme by October 2016.

Because the proposals were opposed by various bodies within the legal profession, including the Law Society and the Bar Council, the DoH had to reconsider its plans.

On 31st January 2017, it opened a new consultation, this time to consider a FRCs regime for clinical negligence claims up to a value of £25,000.

Why is the DoH proposing such a regime?

FRCs schemes for claims worth up to £25,000 have already been introduced in other areas of personal injury litigation, such as road traffic accidents, public liability and employer liability. Their aim is to reduce expensive and lengthy disputes over costs and provide some certainty to all parties involved.

The DoH also anticipates an improvement in the cost-effectiveness and efficiency of processing claims. Streamlining the process and settling claims earlier is also better for the claimant and his family.

It has also been suggested that resolving disputes more quickly will directly contribute to improving patient safety, by identifying the issue that led to the negligence and focussing on preventing a recurrence rather than defending it.

Claims worth up to £25,000 account for approximately 60% of all claims against the NHS and it is believed the money saved by lower litigation costs could be used to fund NHS front-line services instead. Any new regime would also apply to claims against private and not-for-profit healthcare providers.

What did the consultation say?

When the consultation opened at the end of January it asked for comments on four proposed options for a FRC fee structure for clinical negligence claims across England and Wales.

These were:

  1. a flat fee paid at certain stages across the litigation process, regardless of the value of claim;
  2. a flat fee as in option one, plus a percentage of the damages;
  3. a flat fee as in option one, but with small reduction if there is an early admission of liability; or
  4. a cost analysis approach

Since the application of the regime would be decided by the value of damages agreed and awarded, any claim in which damages subsequently exceeded £25,000 would automatically fall outside its remit.

There is also a proposed cap of £1,200 (total) for each party (claimant and defendant) on fees for expert witnesses and a fixed advocacy fee according to the value of the damages awarded.

What has been the reaction to this?

Lawyers say that the proposals would only make the most straightforward cases commercially viable, meaning many of those affected by clinical negligence would have no legal remedy.

These lower value claims may include clinical negligence cases such as

  • Dental claims
  • Pressure sore claims
  • Cancer diagnosis delays
  • Delay in the diagnosis of fractures
  • Psychological injury claims
  • Claims for still births, the death of a child or the death of an elderly person

One firm said the view that sufficient expert evidence to support (or defend) such claims could be obtained for a total of £1,200, was flawed. These claims are not necessarily less complex than large value claims and the work required to analyse and prove smaller value claims does not directly correlate with the value of damages. One of the factors driving the costs up was long waiting times for the recovery of medical records, or arduous expert reports.

However, in a survey conducted by the Medical Protection Society (MPS), it was found that 81% of those asked supported the fixed costs proposal, especially when it helped to preserve NHS funds. It is reported that around 34% the of the £1.5bn paid out in clinical negligence claims by the NHS in 2015/16 was for legal costs.

The MPS director of claims stated that in lower value claims it is not unusual to see lawyers' costs exceed the compensation awarded to claimants and cited one example where legal costs of £72,320 were sought for compensation settled at £3,250. Although this was reduced to £24,600, the costs may still be seen as disproportionate in some quarters.

The MPS has called for the FRCs scheme to apply to cases valued up to £250,000

What might be the outcome?

It is hoped that the responses to the consultation will be fully considered, but it seems there will be some move towards fixed recoverable costs for clinical negligence claims. When and in what form remains to be seen.

Jenny Jones, Senior litigator

Jenny Jones, Senior litigator