A third of the £1.1 billion paid out by the NHS in compensation last year went to lawyers. Next year the cost to the taxpayer is expected to rise to £1.4 billion with the NHS warning of its “increasingly difficult task” in managing the level of payouts.
Ministers are concerned that costs are too high and divert money from patient care. Costs in lower value claims, says the Department of Health, are “particularly disproportionate to the value of damages paid to claimants”. In 2013/14, legal costs paid to claimants amounted to 273 per cent of damages awarded in claims of £1,000 to £10,000; 153 per cent in claims of 10,000 to £25,000; 107 per cent in claims of £25,000 to £50,000; 74 per cent in claims of £50,000 to £100,000 and 54 per cent in claims of £100,000 to £250,000.
In its recent annual report, the NHS Litigation Authority (NHS LA), which handles claims, also expressed concern about the size of some bills and what it says is a large number of unjustified claims.It was “impossible to justify” the increasing number of cases where significantly more money was billed by claimant solicitors for costs than was paid in compensation, it says.
Hence government plans announced in July to cap costs charged by lawyers in clinical negligence claims. There is some judicial support for the move, including from Lord Justice Jackson and Lord Dyson, Master of the Rolls. The authority estimates that £80 million a year could be saved if costs are fixed on claims up to £100,000.
At the same time, the authority is taking a tougher line, challenging more claims and — it says — saving more than £1.2 billion for the NHS by rejecting claims that have no merit. Ian Dilks, chairman of the NHS LA, said: “The costs of litigation are placing a burden on NHS finances of a magnitude that was never imagined when the NHS LA was established.”
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Despite legislation curbing legal aid and no win no fee deals, the NHSLA is seeing “an increasing number of plainly excessive and disproportionate costs bills, the presentation of which coincides with the banning of success fees [in which solicitors could charge up to 100 per cent of their normal rates] and the reduction of the recoverability of the full cost of after-the-event (ATE) insurance against the defendant.”
The findings seem to run counter to original warnings by judges and lawyers that if legal aid was withdrawn, access to justice would be denied. Dr Anthony Barton, solicitor, of consultancy Medical Negligence Team, said: “Latest government figures show an increased number of clinical negligence cases funded by no-win, no-fee agreements — successfully replacing legal aid. This demonstrates the success of privatising access to justice.”
Success or not, costs have inexorably risen. The plan now is to introduce “fixed recoverable costs” for claims of up to £100,000 and possibly also up to £250,000. A consultation is planned for this autumn. Catherine Dixon, chief executive of the Law Society, has already hit back at the proposals. Dixon is a former CEO of the NHSLA so speaks with some knowledge. Of the £1,169,506,598 spent last year by the NHSLA on clinical negligence claims, she points out in the Law Society Gazette that some 41 per cent — almost half a billion pounds — was for obstetric claims, mainly paid to brain-damaged children for life-long support.
At the end of March 2015 the NHSLA had £12.5 billion of claims on its books. It has also calculated the cost of claims from negligent care yet to be reported. In all, the total cost of known claims, costs of ongoing care and amount of claims incurred but not yet reported is £28.6 billion .”I am all too familiar with these figures,” Dixon says. “To put them in perspective, clinical negligence provisions on the government’s balance sheet are the second highest behind the cost of nuclear decommissioning.”
No wonder officials want to reduce costs. Details have yet to come but Dixon warns that the proposals could damage access to specialist advice, driving out experienced solicitors and ushering in claims management companies and spurious cases. “It is perhaps easy to forget when faced with balance sheets that clinical negligence claims are brought by people who have been injured through no fault of their own as a result of negligent NHS care and need specialist advice from a solicitor to help them get the compensation they are entitled to in law.”
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As for fixed fees on claims of up to £250,000, she dismisses this as “truly shocking”, saying it would include claimsfrom those seriously harmed. “When I was the CEO of the NHSLA I saw inappropriately high cost claims, which are damaging to our profession and should never be condoned. But the reality is that the vast majority of costs submitted were appropriate for the work done. This is reflected in the fact that most costs are settled by the NHSLA and not taken to detailed assessment at court.”
Rather than focussing on claimant solicitors’ costs, she argues this should be on “reducing the amount of negligent care harming patients in the NHS”. The focus is certain to be both.