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MPs question ending the recoverability of success fees

28 June 2011

MPs on the health select committee have questioned the government’s decision to press ahead with ending the recoverability of success fees in medical negligence cases.

In a report on NHS complaints and litigation published today, the committee noted the government’s support for retaining recoverability of ATE insurance premiums for medical negligence actions.

The move was a feature of last week’s Legal Aid, Sentencing and Punishment of Offenders Bill (see solicitorsjournal.com 21 June 2011).

However, MPs warned that ending the recoverability of success fees could “impact negatively on some of the most injured and disabled claimants, both by reducing the value of final settlements (after erosion by fees) and by undermining access to justice”.

The committee said that “preservation of access to justice” would be the yardstick by which the proposals would be judged by the public and the government must “gauge its proposals against this measure”.

MPs also called for a review of the regulation of claims management companies (CMCs). Jack Straw, the former justice secretary, said yesterday that regulation of CMCs needed to be strengthened, while calling for the abolition of referral fees (see solicitorsjournal.com 27 June 2011).

The committee said there were around 3,000 CMCs operating in the UK and around 1,000 sought authorisation to enter the market each year.

MPs said they were concerned that claims farmers encouraged people to go straight to litigation, rather than using complaints resolution procedures.

They warned that the “bidding process may not lead to the cases being passed to the advisers best able to resolve the claim, and that they unduly contribute to the rising costs of litigation to the NHS.”

They called for a review of the regulatory structure for CMCs to ensure that patients and taxpayers were protected.

MPs welcomed the principle of speeding up procedures for lower value medical negligence claims, following the government’s decision to try and extend the RTA portal scheme for claims worth between £1,000 and £10,000.

However, the committee said it “would like to see evidence of how the complexity of low monetary value claims will be managed whilst costs are reduced”.

Categorised in:

Procedures Clinical negligence