Fixed recoverable costs in clinical negligence cases

Clinical Negligence | 9th March 2018

After many months of debate, the government is aiming to cap the costs which lawyers recover in clinical negligence cases. The current indication is that this scheme will apply from October 2018 to most cases where damages awarded to the victims of clinical negligence amount to £25,000 or less. Most people would think that a claim worth £25,000.00 involves a significant sum of money.

The Guardian has recently reported comments that “NHS compensation payments are unsustainable”. NHS figures state that the NHS spent £1.7 billion on clinical negligence claims last year and that 37% of this spend related to legal costs. It is also suggested that annual costs have doubled since 2010/2011.

In a recent edition of the National Health Executive magazine the topic is rather sensationalised by suggestions that unscrupulous law firms are “creaming off excessive legal costs.” It should be noted that claimants costs – where they are disputed – are assessed by an independent costs judge so how can firms “cream off” excessive legal costs?

Jeremy Hunt has acknowledged that it is important to discuss what form of recompense or redress may be appropriate. A starting point may well be for him to take a close inspection of the alarming trend set  by NHS Resolution – the litigation arm of the NHS – to issue a blanket denial of liability in many deserving cases where it is patently obvious that liability should be admitted straight away with a view to minimising the cost to the NHS.

By way of example, I recently settled a case where the same NHS radiologist had failed to spot a spinal tumour on two separate scans which were performed on different dates. For some reason, all liability issues were disputed by NHS Resolution and the only way to obtain redress for the client was through the issuing and serving of proceedings.

It is indeed, in my experience, becoming routine for claimant solicitors to have to actually issue proceedings in these cases – otherwise there is no alternative means to obtaining access to justice for clients.

One problem facing claimants is that the cost of issuing proceedings is becoming prohibitive due to the government’s decision in late March 2015 to exponentially increase court issue fees. By way of example, in February 2015, the cost of issuing a claim form in relation to a claim worth up to £50,000.00 was some £395.00. In April 2015, the cost was increased to £2,500 (a six fold increase) who knows, the court issue fees may be increased again.

It is envisaged by the government and medical defence organisations that the answer to saving costs is to introduce costs capping? Many defence organisations are actually hoping that the principle of fixed recoverable costs will actually extend to cases worth up to £250,000.

Whilst there might just be an argument for introducing costs capping in very straightforward and very low value cases where liability is admitted promptly by the NHS, the reality is that these cases are few and far between. Clinical negligence cases invariably turn on medical evidence and can be very complicated to investigate even where damages are likely to be worth less than £25,000. There is a very real risk that costs capping will inevitably led to experts’ fees being slashed to an unsustainable level which will cause many experts to refuse to accept instructions in this type of work. Clients therefore face being denied access to justice in a large number of the cases where the government is aiming to introduce fixed recoverable costs.  It is very difficult to see how the scheme is going to benefit the vast majority of claimants whose cases are worth under £25,000.

These persons are not presently being denied access to justice although the road to obtaining justice is (through no fault of the claimants) often a long and expensive one as a result of the NHS propensity to deny liability after receiving a letter of claim. Further, the current system in place for controlling costs in claims of this nature – namely costs budgeting – has not really been tested for a sufficiently long time to make an informed decision as to whether that system is, in fact, already a very workable one.

It is difficult to conclude other than to say that the government measures will help protect negligent defendants from the full consequences of their actions. As for the victims of negligence, the doors of justice seem to be closing on them.

Gerard Sanders

Partner, Personal Injury and Clinical Negligence

Gerard qualified with a large regional firm in 1991. Since 1995 he has specialised exclusively on claimant personal injury work. More recently he ha...