Consultation launched on fixed recoverable cost proposals for lower value clinical negligence claims

The government has launched a consultation on proposals to introduce fixed recoverable costs (FRC) and a new “streamlined” process for clinical negligence claims with a value of up to £25,000 in England and Wales.

Th government said the rationale for the proposals is that the cost of clinical negligence claims has risen substantially in recent years – from £582m in 2006/7 to £2.2bn in 2020/2021 – and it claims legal costs account for a significant part of the increase. It said over the same period, legal costs rose fourfold and accounted for 27 per cent of the total cost of clinical negligence in 2020/21.

According to the consultation, claimant costs are much higher and have risen more quickly than defendant costs over the same period and legal costs associated with low value claims are disproportionately high. It states that in 2020/21, the average legal costs recovered from the NHS by claimant lawyers was twice the average amount paid out in damages to claimants, for lower value clinical negligence claims.

The consultation also states lower value clinical negligence claims can take “too long” to resolve. Over the last 10 years, the average claim duration has increased by 46 per cent to 1.3 years for lower value clinical negligence claims, which have seen the greatest rise, according to the government. As such, it has suggested such claims would benefit from a streamlined process to speed up “fair resolution”.

The consultation is seeking views on several aspects of its proposals.

With regard to the streamlined process:

·       The overall definition of claims to be included in the scheme

·       A two-track FRC scheme, divided into a light track and a standard track

·       A streamlined process for early resolution of claims whereby there is a rapid exchange of medical evidence and a mandatory stocktake to resolve claims

·       Evidentiary requirements for evidence exchanged between parties in the scheme

·       Template letters and model expert report elements to be used in the initial exchange of evidence between claimants and defendants

·       A mandatory neutral evaluation stage for claims that have not settled fixed costs, exclusions, sanctions and implementation.

With regards to fixed costs, exclusions, sanctions and implementation:

·       Proposed fixed costs for each stage and claims track

·       Which claims should be excluded from the scheme based on complexity and sensitivity of certain claim categories

·       Sanctions to encourage adherence to the rules of the scheme and incentivise resolution of claims within the scheme

·       The claims the FRC scheme will apply to, at date of implementation.

The government has also sought views on its proposal to conduct a post-implementation review of the £25,000 upper limit for claims included in the scheme, and at regular intervals thereafter, to adjust for inflation in the value of claims.

Some members of the profession have expressed frustration at the proposals and suggested the government and NHS should reflect on their own practices before proposing changes to the legal system.

Stephanie Prior, head of clinical negligence at Osbornes Law, said: “Bringing in fixed costs will seriously preclude some of the most vulnerable people from getting access to justice”.

Prior said many low value claims are “deeply traumatic for the families involved” and that if the proposals were introduced she would expect many specialist clinical negligence lawyers would no longer be able to take on low value claims.

Prior added: “While it is true that costs can spiral on cases this is generally because the NHS lawyers sometimes drag out cases for an inordinate amount of time, which inevitably has to be paid for. If the NHS legal teams were more efficient, then these matters could be dealt with a lot more swiftly, meaning costs are significantly less. It would be far better for the NHS to look after the people it has wronged swiftly rather than seek to restrict their access to justice in this way.”

Qamar Anwar, managing director of First4Lawyers, said: “This all has a very familiar ring to it, mirroring what has already happened in personal injury for so called ‘lower-value claims’, where, despite the best efforts of the government, claimants have shown they still need legal help but are severely limited by the number of law firms able to help them.

“It is true that legal costs have risen in recent years. However, this is only in line with the overall increase in all costs associated with medical negligence claims”.

Anwar added: “The government should focus on finding out what is causing negligence in the first place rather than attacking the system that supports innocent victims when things go wrong.”

The consultation closes at 11:45pm on 24 April 2022.