Fixing the fixed costs proposals

The health secretary, Jeremy Hunt, recently announced the details of the fixed costs regime for clinical negligence cases, which would be mandatory '¨for all claims worth up to £25,000 in compensation. '¨The consultation paper '¨puts forward the following '¨fee options:

A fixed recoverable amount, irrespective of settlement value, which would depend on the stage at which the claim was settled. Trial fees are in addition to these figures and a 10 per cent reduction is proposed for early admission of liability within a defined period; or

A lower fixed recoverable sum but an additional amount calculated as a percentage of the final damages awarded. 

The consultation paper states that the annual cost of clinical negligence claims has risen from £1.2bn in 2014/15 to £1.5bn in 2015/16. By way of '¨an approximate breakdown, damages were £950m, claimant legal costs £418m, and defence legal costs £120m. 

The amount of the claimant fees is not a huge surprise, as the claimant will pay for medical records, court fees, and after-the-event insurance premiums. Further, defendant hospitals usually manage claims to a certain stage themselves before involving solicitors and incurring legal costs, whereas an injured person will require assistance from a solicitor from the outset. 

However, there will be some cases that are simply not suitable for fixed recoverable costs and failing to pursue them will lead to injustice. At the very least, exemptions should be applied '¨to cases that are particularly complex, or those that involve stillbirth and bereavement. 

It is difficult to define a ‘complex’ case, but it can be said with conviction that the level of damages does not necessarily indicate the complexity of '¨the matter. Factual and legal complexities need not be proportional to the damages claimed. 

Damages for bereavement '¨are fixed by the government at '¨a figure well below £25,000, and therefore if exemptions are not applied, it will restrict the ability of families who have lost a loved one to pursue a claim. 

The Law Society president, Robert Bourns, agreed with this, stating that ‘draft plans could see harmed patients denied the correct level of compensation unless the proposed scheme excludes complex cases and includes exemptions for '¨unusual circumstances’.

The government has also '¨not addressed how the NHS Litigation Authority contributes to increased legal costs by taking an unreasonable approach to claims – for example, resisting payments on account of damages where liability has already been admitted or continuing to use ‘deny, defend, and delay’ tactics (SJ161/6), increasing the costs incurred '¨by the claimant’s legal team. 

Surely the approach to take would be to reduce the number of mistakes in hospitals, by providing better training, adequate staffing levels, and robust procedures which will reduce the number of claims and in turn the amount of damages and costs paid to claimant solicitors. In the long term, this will save a large amount of money as well as human lives, the cost of which of which is far greater than any NHS budget. 

Another method where action can be taken is to implement sanctions where there is a failure by hospital staff to follow the duty of candour and not willingly reveal things when they go wrong. In my experience, some patients only pursue claims because they have not had an honest explanation about what went wrong with their treatment and an apology.

This does bring the question of whether fixed costs would '¨still be necessary. In the recent case of BNM v MGN Ltd [2016] EWHC B13 (Costs), it was '¨made clear that costs can be reduced by applying the new proportionality test. If costs judges are already considering proportionality and managing costs, is there a need for further restrictions? 

Following Hunt’s announcement, the NHSLA '¨is thought to want the fixed recoverable costs threshold '¨to be set at £100,000, but this just isn’t viable. 

The reality is that clinical negligence law is a very complex area which requires a great deal of in-depth investigation and extensive evidence, and you cannot accurately fix the level of costs required just by reference to the final compensation paid. 

Fixed costs will not only restrict an injured patient’s ability to bring a claim, but also may breach article 6(1) of the Human Rights Act 1998, as in effect individuals may not be able to obtain access to legal advice and representation. 

Other methods can instead '¨be used to reduce legal costs, such as having an increased focus on improving the standard of medical treatment and ensuring early admissions are made by the defendant in appropriate cases. 

If fixed costs are to be implemented, they must be set at a much lower amount and make exemptions for cases that involve complexities, stillbirth, and bereavement.

Bhavesh Patel is a solicitor at Royds Withy King

@RoydsWithyKing www.roydswithyking.com