Are lawyers really overcharging the NHS in clinical negligence cases?

News | Tue 30th Jun, 2015

The government announced on 29^th June 2015 that it planned to fix legal costs for clinical negligence claims up to £100,000 and that the lawyer’s fee would reflect the percentage of the compensation received by the patient.  The Health Minister, Ben Gummer, claims to want to reduce the alleged £259M bill for legal fees which the NHS said it paid out over clinical negligence claims in 2013/14.  There was no breakdown at all to the figure “for legal fees”.  It is unclear whether this included just fees paid to claimant’s lawyers as opposed to lawyers instructed by the NHSLA.  The Department of Health said in its press release that even if the compensation claim is small, lawyers can claim “extortionate” fees for “”low-cost” cases.  It cited an example of a lawyer “pocketing” £175,000 whilst the patient received “just” £11,800 in damages.  No reference at all was made to the complexity of the case and whether the NHS had conceded liability at the outset or whether the value of the claim was subsequently reduced to reflect a litigation risk on liability or even whether after investigation the claimant’s medical evidence changed so as to reduce the value of the claim.  In another example cited by the DoH it said that in one case the legal bill was more than £80,000 while the patient only received £1,000 but it transpired that in fact the legal bill was later reduced to less than £5,000 by the court “after a successful challenge by the NHSLA”.  Apparently ministers are considering detailed proposals ahead of a formal consultation in the autumn.  

What is striking about all of this is that despite the radical changes (the word reform is overestimated in my view) introduced in the wake of the Jackson Report including the reversal of the Lowdnes principle, the abolition of success fees and the recoverability of insurance premiums not to mention costs budgeting, the government seems intent on effectively denying proper access to justice to innocent victims of clinical negligence.  Whether the DOH consulted with the MOJ about its announcement is unclear.  The cynics amongst us would suggest that there is no joined up thinking in government at all.  We know that the senior judiciary have been pushing for fixed costs on the multi-track for some time now.  It is frankly baffling for it to be suggested that there should be or could be a fixed costs regime for only clinical negligence cases against the NHS (what about private healthcare providers?) separate from all other types of personal injury claim.  

Neither is there any recognition in yesterday’s announcement that the NHS legal bill is as high as it is because of the NHS’s failure to admit liability at an early stage meaning that legal costs incurred by claimants increase rapidly as a result.  The new statutory duty of candour which came into force fully from 1^st April 2015 is a welcome step but one would have thought it more sensible to consider costs on the multi track generally including clinical negligence claims against the NHS and also only after we have seen whether the statutory duty of candor makes any difference to the NHS’ legal bill.  After all, the government also announced yesterday that there were new guidelines for doctors, nurses and midwives who are now to be subject individually to the duty of candor with the guidelines making it clear that patients should expect a face-to-face apology.  

The hard truth is that clinical negligence claims are commonly difficult and challenging cases. It is noteworthy that the government has not said that such “extortionate” legal costs are generated by unmeritorious claims – quite the opposite. If negligent medical mistakes occur and ruin and damage lives as a result it does not seem that the government (yet) wants to deny the victim suitable compensation. It just wants to deny their lawyers the fees which the court has approved – after all the incurred and estimated future costs have never been under such scrutiny by the judiciary. Apparently none of this is enough for the government.