Ministers press ahead with clin neg fixed costs

The government this week published its long-awaited plans for fixed recoverable costs in clinical negligence cases – but only for cases worth up to £25,000.

A pre-consultation exercise carried out in 2015 suggested the level could be as high as £250,000, but health minister Lord O’Shaughnessy said: “We have taken into account legitimate concerns about access to justice.”

The Department of Health (DoH) estimated that the lower cap would still “release a saving of approximately £45m per annum by 2020/21”.

The DoH said awards of between £1,000 and £25,000 – around 60% of all claims settled by the NHS – encompassed the greatest disproportionality between claimant costs and damages, with claimant recoverable costs 220% of the damages awarded.

“Our proposition is that the disproportionality and the time taken to settle are not in the best interests of either the patient or the taxpayer,” the consultation said.

The DoH has put forward four possible methodologies to sit behind the rates. Three are based on an estimation of legal time required under a streamlined process, put together by an advisory group and based on the guideline hourly rates.

The first option is a flat fee staged depending on when the case settles; the second a lower staged flat fee plus a percentage of damages; and the third a lower fee where the defendant makes an early admission of liability.

The fourth option is a costs analysis approach put forward by Professor Paul Fenn, the academic whose costs data analyses have underpinned the introduction of fixed costs in the civil justice system over the past 15 years.

This would be based on the mean relationship between current costs and damages using data from Costs Lawyers who deal with many claims against the NHS, and then reduced corresponding to the assumed efficiency savings from FRC and a further reduction of 10% if there was an early admission of liability.

The consultation also proposes:

– A standard additional fee for experts of up to £1,200 for defendants and claimants alike for claims that settle.
– An exemption to fixed costs for claims where the number of experts reasonably required by both sides on issues of breach and causation exceeds a total of two per party;
– An independent single joint expert should be appointed to provide an opinion on breach of duty and causation (in broad terms) at an early stage;
– Trial court costs will be paid in addition to the final stage fixed costs (a trial occurring when an advocate addresses the court in a contested final hearing). Recoverable trial costs will be in accordance with table 9 of CPR 45.38;
– The fixed costs scheme would include counsel costs, save for the trial advocacy fee. However, where fees are necessarily incurred for settlement approval because the claimant is a child or protected party, these would be separately recoverable; and
– A possible exemption from fixed costs for child fatalities arising from clinical negligence.

The consultation has received a mixed response. While some claimant lawyers have welcomed the £25,000 limit, others have complained that the consultation should not occur until after the National Audit Office has completed its review of how the NHS manages clinical negligence cases and their costs, as well as Lord Justice Jackson’s review of fixed recoverable costs and the Ministry of Justice’s review of the effect of the LASPO reforms.

 

This post was posted in ACL e-Bulletin

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Costs News
Published date
10 Feb 2017

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