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Reducing NHS' Spending on Legal Costs - It's a 'No-Brainer' Surely?

View profile for Kimmo Boote
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As part of it’s ongoing drive to reduce the NHS’ annual budget of £115 Billion by £5 Billion, the Department of Health is looking at reducing the costs of clinical negligence claims against the NHS – including the possible introduction of fixed costs.

According to the NHS Litigation Authority’s figures for 2013/14, claimant legal costs amounted to £259 million, or 22% of the £1.2bn expenditure on clinical negligence claims. Defence costs accounted for 8% (£92.5m) of spending.

Whilst these figures may seem staggeringly high, it should be borne in mind:

a) The NHS’ annual wage Bill to staff on ‘sick leave’ is around £2.5 BILLION, with NHS staff taking nearly twice the amount of ‘sick leave’ that people in the Private sector take.

b) As stated above, the NHS’ total Budget is around £115 BILLION, and it can therefore be seen that expenditure as a result of it’s own mistakes is costing the NHS only about 1% of it’s budget.

c) Consider that the NHS is one of the largest employers in the world – with over 1 million 300,000 employees, putting it on a par with the huge US retailer, Walmart. Within it’s ranks, the NHS has over 37,000 managers. Just think what their wage bill must be…

d) The NHS spends huge sums on locum Doctors – with one hearing regular stories of overseas Consultants being flown in to carry out operations.

If the Government gets it’s way and introduces Fixed costs to Clinical Negligence claims – with a proposed implementation date being October 2016 – the effects of this could include:

The NHSLA defending cases that it may previously have admitted – on the basis that it knows that the claimant only has a limited Budget (eg fixed costs of £5,000) – and will therefore ‘throw the towel in’ if it reaches the fixed costs limit with no sign of the NHS caving in.
Law Firms refusing to take on riskier or complicated cases on the basis that they will not be compensated well-enough to justify the risk in the first place, therefore resulting in claimants with genuine cases being denied access to Justice.
Law Firms employing more and more poorly qualified and in-experienced case workers - as they will be cheaper to employ – though with the potential for costly mistakes being made.
Claims being under settled – as a result of the Legal representative doing a minimum amount of work on a case so as to make it profitable.  

The Government’s stance in wanting to reduce the costs of expensive Lawyers who use up valuable NHS resources may strike a chord with voters – though with the likely result being that access to justice will be denied to many claimants who will have been injured by the very people that they had trusted to look after them in the first place.  

Part 2 of this article will be posted shortly...