As part of its ongoing drive to reduce the NHS’ annual budget of £115 Billion by £5 Billion, the Department of Health recently looked at reducing the costs of clinical negligence claims against the NHS – including the introduction of fixed recoverable costs (FRC).
The main proposal that has been mooted is to apply fixed costs – with the amount of costs payable to be decided – to claims that are worth up to £25,000.
At the time of writing, LJ Jackson has just released a report on FRC, the conclusion of which stated:
I recommend that the Civil Justice Council should in conjunction with the Department of Health set up a working party, including both claimant and defendant representatives, to develop a bespoke process for clinical negligence claims initially up to £25,000 together with a grid of FRC for such cases.
According to the NHS Resolution’s (formerly called the NHS Litigation Authority – I wonder how much this re-branding exercise earlier this year cost the tax payer….?!) 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 excessive, they can be placed into context when bearing 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) The NHS’ total budget is around £115 BILLION, comparable to the GDP of Ghana. Therefore it’s expenditure as a result of it’s own medical mistakes, is only around 1% of it’s budget.
c) The NHS is one of the largest employers in the world – with over 1,300,000 employees. Within its 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 there being regular cases of overseas Consultants being flown in to carry out operations.
If, or rather when the Government gets it’s way and introduces Fixed costs to Clinical Negligence claims – the ramifications could include:
1. NHS Resolution 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 £4,000) – and will therefore ‘throw the towel in’ if it reaches the fixed costs limit with no sign of an end in sight to the case.
2. Law Firms refusing to take on complicated lower value cases, eg stillbirth cases, on the basis that they will not be compensated well-enough to justify the risk in the first place. This will result in claimants with genuine cases being denied access to Justice.
3. Law Firms employing more poorly qualified and inexperienced case workers – to reduce overheads - though with the potential for costly mistakes being made.
4. 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, for example failing to properly assess a loss of earnings or care claim.
Whilst 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 & tax payers – the likely result will be 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.
Here at Dutton Gregory we handle a huge variety of clinical negligence claims, ranging from Cerebral Palsy cases which attract awards of several million pounds or more, to more modest claims such as an individual who was prescribed the wrong type of medication for a few months, receiving damages of £3,000. With each and every case that they deal with, the case handler has to combine professionalism, economics and empathy for the injured claimant.
The variety of cases, as well as the complex nature of investigating clinical negligence makes the job very rewarding, especially when we settle a case for a client that may have taken several years to process. Indeed, we have had some cerebral palsy cases that owing to their very nature, have taken over 10 years to settle (the reason being that the child has to be continually assessed as they grow older so as to determine the extent of their injury). During the life of these cases the case handlers often develop very close working relationships with the claimants’ families.
NB This article does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Dutton Gregory LLP.