Midwives granted costs-capping order in insurance dispute with regulator

A group of independent midwives has been granted a costs-capping order in its claim for judicial review of the Nursing and Midwifery Council’s (NMC) decision that the midwives’ professional indemnity arrangements were inappropriate, with the level set at a tenth of the costs the NMC had estimated.

According to a report on Lawtel, Mr Justice Ouseley ruled that they were public interest proceedings under – although the proportion of midwives affected by the decision was small, the effect on them was significant.

In R (On the application of Hannah Beety & Ors) (Claimant) v Nursing & Midwifery Council (Defendant) & (1) Independent Midwives UK (2) Lucina Ltd (Interested Parties), the claimants worked independently in private practice. IMUK, which had about 70 members, had arranged professional indemnity insurance through the second interested party, Lucina Ltd. The NMC found that the indemnity offered was inappropriate given the nature and risks associated with childbirth where catastrophic injuries were possible.

The claimants sought an order that, should they lose, their liability to pay the NMC’s costs would be limited to £20,000, with a reciprocal cap limiting their recovery to £50,000. The NMC argued that the issue affected only about 70 midwives, out of 43,000 in the country, and only a small number of pregnant women.

Ouseley J held the NMC’s decision would very significantly reduce the public’s opportunity to choose the type of midwifery offered by the claimants and their colleagues, and had the potential to seriously affect their earnings and their mode of working. They could work without the Lucina indemnity, but it would be different work.

The number of users of their services was small (about 600 births a year) but not insubstantial. The case, he concluded, was just sufficient to pass the test of being public interest proceedings in section 88(7) of the Criminal Justice and Courts Act 2015.

The claimants said they would withdraw their application for judicial review if they did not obtain the costs-capping order. The NMC’s estimated costs were £250,000 – a figure that would bankrupt the claimants if they lost – and those costs would be in addition to their own legal costs.

The report said: “Even if the claimants could raise more money, it would not be enough. If they won at first instance, given the importance of the question there would likely be an appeal. Moreover, judicial review litigation of the instant sort was unlikely to lead to compromise. Success was always uncertain.

“The claimants had applied for legal aid, but had obtained only an emergency certificate, which might be withdrawn. The council had substantial income and £41m in the bank. It would not notice the loss of recovery of costs in the instant proceedings.”

The individual claimants had made no contribution. Only 13 or 14 IMUK members had contributed, and £25,000 had been raised by crowdfunding. IMUK had pledged all of its resources, about £40,000, to the cause. Lucina had not contributed or offered to do so, because its funds were intended to be used to meet claims, which the judge said was understandable.

However, the man running Lucina had provided a personal guarantee of £250,000, but the judge found that his savings and property equity should not be taken into account as neither he nor Lucina would benefit from the case.

“Independent midwives earned modest incomes, but if the matter was important to them it was right that they made a larger contribution than they had so far. In relation to section 89(1)(d), it was not realistic to suppose that a costs-capping order should not be made unless the lawyers were acting for nothing. It would not be fair for public law solicitors, who already faced funding difficulties, to be expected to work pro bono. Therefore it did not matter that the claimants’ solicitors were being paid, albeit on a no win, discounted fee basis.

“Under section 89(1)(e), certainly the claimants were appropriate persons to bring the action, and under section 89(1)(b), IMUK would benefit if relief was granted. A costs-capping order was warranted, even if the case was marginal on the public interest point.

“The offered cap of £20,000 was too low. Approximately 50 members of IMUK had not contributed; if each contributed £100, a further £5,000 could be raised, so the cap should be £25,000. The reciprocal cap should be £65,000.”

In a statement, IMUK welcomed the ruling, saying: “The judge recognised the direct and severe impact on Independent midwives themselves and the very different nature of working in the NHS versus the IM gold standard of continuity of care to each woman. He also recognised the indirect impact on hundreds of women who could no longer rely on our support and care.

“The NMC opposed this order root and branch and this represents a huge victory. Our lawyers – Deighton Pierce Glynn – have worked tirelessly to defend independent midwifery at much lower rates than we could have hoped to find anywhere else. We have had amazing support from QCs – with some work even being done free of charge.

“This case also sets a precedent and will help others, especially vulnerable and worse off applicants in future, who would otherwise be prevented from seeking justice and challenging decisions they believe to be wrong.”

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Costs News
Published date
30 Jun 2017

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