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Fixed costs in clin neg: The prog rock of consultations

David Brown

Brown: Most firms will have no choice but to exit the lower-value market

Posted by David Brown, ATE underwriting manager at Litigation Futures Associate DAS UK Group

As consultations go, it was always going to be ambitious, sprawling and dividing of opinions. When, in 2017, we submitted our considered thoughts as an industry towards the government’s consultation on fixed recoverable costs in clinical negligence (CN) cases, we did so in the full knowledge that there would be no quick and easy solution.

Such a complex multi-industry issue – weighing up the high costs of litigation against the NHS, versus vital access to justice – wouldn’t be an easy one to move forward, but that’s the task in hand.

Following the recent Society of Clinical Injury Lawyers (SCIL) conference, I thought it might be useful to reiterate our thoughts on the matter.

As an active player in the after-the-event (ATE) insurance market since 2002, DAS UK has gained considerable experience in insuring CN claims, having written over 20,000 policies to date, and we continue to work closely with many leading CN practitioners.

We fully agree with the need to streamline processes, improving and reducing the cost of clinical negligence litigation, and ultimately resolving more cases more quickly. This should be achieved without reducing access justice for patients, irrespective of whether their claims are large or small.

In general terms, we always welcome new measures that ultimately improve care and enhance the experience that patients receive when dealing with the NHS.

In our view, that experience is not limited to when patients are examined, treated or looked after in hospitals and GP practices, but also the subsequent contact where that is necessary – including where litigation is required.

However the introduction of fixed recoverable costs (FRC) is a source of concern for various reasons. Essentially there are already a number of measures in place to limit costs recovery to cases that are deemed reasonable both at an early stage of a claim, and also on conclusion.

But we believe the impact these measures have had on cost proportionality has not been fully realised since a considerable quantity of claims written since LASPO have yet to reach conclusion.

The introduction of FRC in low-value claims will inevitably make it harder, if not impossible, for people with low-value claims to find law firms to run their cases.

Firstly, a revised overriding objective was introduced into the Civil Procedure Rules in April 2013. This enables the court “to deal with cases justly and at proportionate costs”. Costs assessed on the standard basis will not be recoverable if they are considered to be disproportionate.

Secondly, the introduction of costs budgeting has provided claimant, defendant and the court with the opportunity to consider both quantum and complexity of a specific claim and agree an appropriate budget in order to bring the claim to conclusion.

Thirdly, legislative changes introduced under LASPO resulted in the abolition of recoverable success fees and limited recovery of ATE premiums. These changes were introduced to address what were perceived as the disproportionate costs in pursuing claims involving personal injury and CN.

The proposed changes seek to make the current CN process less lengthy and adversarial by abolishing or significantly reducing the existence of claims under £25,000.

This ‘solution’ is likely to achieve this objective, but it will be at the cost of the right to a fair outcome for claimants in low-value cases. At a time when routes to access to justice are under threat more than ever before, it’s this that we find problematic.

Conversations with our specialist partner firms in recent months have suggested that, already, the thorny issue of proportionality has meant that cases valued under £100,000 are less viable to run, due to damages being unconnected to complexity in CN litigation.

It seems to me that it is extremely likely that if fixed recoverable costs are implemented, most firms will have no choice but to exit the lower-value market.

SCIL, supported by the charity Action against Medical Accidents, continues to lobby against the plans, and has submitted its own proposals, which would reduce costs – but, crucially, not at the expense of claimants.

With the weight of these experienced and respected bodies lobbying hard in support of both access to justice and patient safety, we are sure that this debate is far from over.

We’ll be fascinated to see where this goes next. Something pragmatic, possibly even an innovative solution, would be really welcome, but as long as the way forward services the interests of justice, we’ll be happy.

As for prog rock – I’ve always been more of a neo-progressive man.