Move To Control Legal Costs In Clinical Negligence Claims
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- Published: Wednesday, 02 February 2022 07:49
- Written by Peter Ingle
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Dentists who have been working for many years in a climate of aggressive litigation, often from specialist claims companies, may find a glimmer of hope in a newly published proposal.
The Department of Health and Social Care has recently published `Fixed recoverable costs in lower value clinical negligence claims, a consultation’. Whilst written with an NHS focus, the proposed scheme would apply to clinical negligence claims relating to medical treatment provided by NHS, non-profit and private healthcare providers in England and Wales, but would not apply in Scotland or Northern Ireland.
The stated objective is to create a faster, fairer and more cost-effective system that benefits claimants and defendants and reduces the costs to the NHS. The consultation seeks views on the government’s proposal to introduce a mandatory system of fixed recoverable costs (FRC) in lower value clinical negligence claims. The key change would be that FRC is a mechanism by which the recovery of legal costs by claimants would be fixed in advance and based upon a table of recoverable costs. This would apply to all cases within the scope of the scheme.
According to the National Audit Office, between 2006/7 and 2020/21, the cost of claims rose fourfold from £0.6 billion to £2.2 billion. As most of these costs are borne by the NHS, the increases have placed significant strain on NHS budgets. Legal costs represent a sizeable proportion of this rise. The total legal costs (claimant and defendant) of bringing and processing clinical negligence claims have soared from £152 million in 2006/7 to £582 million in 2020/21, making up 27% of total clinical negligence costs. Since 2013/14, the volume of claims has remained broadly stable, but despite this, in the period from 2013/14 to 2020/21, legal costs nearly doubled. For lower value clinical negligence claims, between £1,001 and £25,000, the average claimant legal cost per claim doubled from £10,121 in 2006/7 to £22,124 in 2020/21. A telling set of figures show that claimant legal costs are disproportionate to levels of compensation: the average claimant legal cost for the £1,001 to £25,000 value band was twice the average amount paid out in damages to claimants, in 2020/21.
Commenting, Dental Protection, who have long highlighted cases of excessive claimant legal costs, have welcomed the consultation in principle. They intend to call on the Government to ensure the proposals have a meaningful and positive impact for dentistry– including considering whether cases up to the value of £250,000 could be included in a fixed recoverable costs scheme.
Steven Davies, Head of Legal Services at Dental Protection said:
“It is not unusual for the costs awarded to claimant lawyers to be significantly higher than the damages paid to the patient – sometimes it could be two or three times higher. This happens even where claims are settled at an early stage.
For example, in one case of an alleged failure to diagnose a palatal cyst (UL3 area), damages were agreed in the sum of £15,000. The original Bill of Costs submitted was for £93,043.65. Costs were substantially reduced by negotiation to £30,000 however, this figure was twice the amount of damages paid.
This cannot be right, and we have long called for the introduction of a fixed recoverable costs scheme to stop lawyers charging disproportionate legal fees.
Significant attention has been paid to the impact of clinical negligence costs on the wider NHS, but it is important that any scheme also benefits dentistry where this is also a significant issue. We will be studying the proposals closely to assess the likely impact they would have on claims against dentists and we will respond on behalf of the profession.
As part of this, we will make the case that a fixed recoverable costs scheme should be applied in claims up to the value of £250,000, providing a more cost-effective scheme fit for the future of the profession.”
A further case study was provided regarding failure to diagnose and treat periodontal disease. Damages were agreed of £6,000. The original Bill of Costs submitted was for £32,541. Costs were reduced to £22,500 which was still considerably higher than the damages paid. In addition the case also required the use of the MPS external panel solicitors to assist in defending the matter on behalf of our member. The additional legal fees were £3,035.60.
Also responding to the publication, John Makin, head of the DDU, said:
“This consultation has been a long time coming and is a welcome first step. However, for a fixed recoverable cost scheme to have a meaningful impact on claims, the DDU strongly believes that the scope of such a scheme should be far wider – applying to claims up to £250,000. Notwithstanding this, the proposal for a scheme for claims up to £25,000 is welcome. To put this in context, a significant proportion of the cases we settled for below £25,000 in 2020 saw legal costs paid to claimants’ lawyers exceed the damages payment paid to claimants by over 500%.”
Accompanying the consultation document are an Equality duty analysis and Impact assessment which would not appear to present barriers to the consultations progress. Clinicians faced with constantly rising indemnity costs will be hoping that this consultation leads to real progress.
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