AML: HMRC flexes enforcement muscle to the tune of £7.8 million
You may have seen the recent press coverage relating to the government’s plan to consider introducing fixed recoverable costs for personal injury claims involving clinical negligence worth up to £250,000. There is an underlying premise that this will save the NHS money at the expense of ‘greedy’ lawyers. I find it frustrating that the approach and behaviour of NHS Defendants (which drive up Claimant costs) has so far been overlooked. Additionally, I question the impact that fixed costs would have on injured Claimants’ access to justice.
Defendant behaviour drives up costs
As an experienced Claimant medical negligence specialist lawyer, I have seen persistent trends in the way that Defendants choose to litigate which sadly show no sign of abating.
This sort of litigious conduct is costly for Defendants (usually NHS Trusts). It makes it more expensive for us to have to fight (and win) all these unnecessary battles along the way to getting our clients a fair award of compensation. How costly? Well according to the Daily Telegraph, of the top 10 law firms which bill the NHS (whether for damages, costs, or both), seven were Defendant specialist firms and only three exclusively represented injured Claimants.
Following the Francis Inquiry into the Mid-Staffordshire Hospital Scandal some of these things were supposed to change, particularly at the early stages. A statutory Duty of Candour (which came into force on 1 April 2015) was introduced obliging NHS Trusts to volunteer all relevant information to persons who have or may have been harmed as a result of poor care with prompt apologies, explanations and reassurances regarding future care to be given.
This sort of transparency (if properly adhered to) will undoubtedly help to improve healthcare standards. However just when things were starting to look a little more optimistic for injured patients, the government has recently announced its intention to consider putting strict limits on legal costs in cases where the value of the claim is below £250,000.
Focus on the cause of negligence
In justifying these proposals Health Minister, Ben Gummer, explained that “safe, compassionate care is my upmost priority and to achieve this, the NHS must make sure every penny counts”. In his view “Unscrupulously, some lawyers have used patient claims to load grossly excessive costs onto the NHS and charge far more than the patient receives in compensation”. I wonder whether Mr Gummer also meant the Defendant specialist firms referred to above.
In my view, if the government really wants to save money and better allocate NHS resources, then it should be ‘tougher on the causes of clinical negligence’. Catherine Dixon, the Chief Executive of the Law Society (and former CEO of the National Health Service Litigation Authority) recently wrote in the Legal Gazette that:
‘Last year the NHSLA spent £1,169,506,598 on clinical negligence claims. Of this, some 41% - almost half a billion pounds - was for obstetric claims, mainly paid to brain-damaged children to cover the support and adaptations they need to help them live as normal a life as possible…Given this reality, plus the fact that almost half of these costs are arising from brain-damaged baby claims, you would think that every action would be taken to stop damaging babies’ brains. If the cost runs into billions and the result is untold misery to babies and their families, isn’t it worth investing more to stop this from happening?’
Yet instead of investing more in the recruitment of new obstetricians so that our maternity wards are better staffed, the government seems to favour a ‘blue sky thinking’ approach of making cost savings by reducing the legal costs of litigation after the damage is done.
The government’s proposals also seem to take no account of the tight cost controls introduced by Lord Justice Jackson and enshrined in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) which came into force on 1 April 2013. These reforms included the introduction of the ‘proportionality test’ effectively meaning that the level of costs sought must now be comparable to the level of damages awarded in order to be recoverable. They also included the abolition of additional liabilities - success fees and litigation insurance premiums - that were previously payable by Defendants.
These changes only happened little over 2 years ago. Most clinical negligence claims take approximately 2 years if not more to settle, with the resolution of costs taking a further 6 months to a year. In other words, there is not yet enough data available on the cost impact of the Jackson reforms to consult on the merits of yet another legislative change (which the government is looking to do at the end of 2015 with a view to introducing the costs cap by October 2016).
Will Claimants have adequate access to justice?
Clinical negligence specialists already have to be much more selective about the cases they can afford to litigate, just to stay in business. Difficult cases on liability are no longer remunerated in such a way that overcoming risk is rewarded. Otherwise meritorious but lower value cases involving for example stillbirth due to negligence or patients with very little life expectancy left (for example the very old and / or the terminally ill) are tragically harder to make an economic case for now. Access to justice will become more even more remote if the government’s proposals are enacted next year.
A fixed costs regime has already been introduced to personal injury claims (involving for example road traffic accidents or accidents at work) worth less than £25,000 – i.e. most of them. These cases are now run through a computerised, nuance-free computer interface called ‘the Portal’. The costs are fixed to no more than a fraction of the total value of the claim. Consequently cases like these can only be profitably run at high volume by inexperienced junior lawyers or paralegals under ‘supervision’.
We cannot let the same ‘one-size fits all’ regime or something similarly impersonal, rigid and ineffective be foisted on injured patients with clinical negligence claims. A case worth £50,000 can still be incredibly complex, requiring liability expert evidence on breach of duty and causation. This simply cannot be done effectively ‘on the cheap’ and I fear for any Claimant litigant faced with the sort of tactics referred to above, that in future could be utilised to draw the litigation out and make it unprofitable to continue.
The government’s plans are illogical since they plan on introducing a costs cap that is 10 times higher for clinical negligence claims than is currently in existence for personal injury claims. Yet it is much more difficult and requires much more skill and experience to successfully conduct a clinical negligence claim worth say £150,000 than it is to run a personal injury claim on behalf of an injured passenger in a road traffic accident worth just £40,000.
In my view, this absence of any logic or supportive and rational empirical evidence just gives these proposals the appearance of being thought up on the back of a populist envelope. Yet the underlying premise that they will save the NHS money at the expense of ‘greedy’ lawyers is already working its tabloid magic.
Injured patients and their representatives do not have the resources or the funds to lobby as hard or as loudly to resist these changes as those who would seek to get them enacted. Many of the changes introduced by LASPO (with the help of the insurance industry) are evidence of that.
Yet for the sake of our injured clients, we must all do what we can to get their voices heard and prevent justice from becoming unattainable. Behind every duty of candour must be an enforceable duty to put right the damage that has been done.
For more information, please visit our Clinical Negligence and Personal Injury page.
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