Government plans for recoverable after-the-event (ATE) insurance for expert reports in clinical negligence cases are fundamentally flawed, it has been warned.
In its response to the Ministry of Justice’s recent mini-consultation on the issue , the Access to Justice Group, which is run by former Labour MP Andrew Dismore, repeatedly criticised the proposals for starting from the “incorrect premise” that each case is individual from the ATE insurer’s point of view, rather than part of an overall pool of winners and losers.
“Without this recognition of the need to look at the ATE providers’ market across the whole of the risk, any proposal from the MoJ will not be practical, given the high failure rate of clinical negligence claims after initial medical evidence has been obtained to enable a merits assessment to be made,” it said.
There was a similar problem with the idea of excluding recoverability where the defendant is notified of the intention to take out the policy and then responds that it either plans to settle or fund the report itself. This would encourage ‘cherry picking’, the response said, and make the ATE market unviable.
AJAG also opposed the suggestion that expert reports on quantum should not be included in the scheme. “It will usually be more cost effective to prepare the reports simultaneously, often involving the same expert (if the expert’s opinion is that the case has merit), rather than go back for a second examination and further report.
“To do otherwise may well unnecessarily increase the costs; and without ATE the cost risk will be prohibitive for the claimant. The claimant could well end up being advised that he has a good case, but cannot then afford to proceed with commissioning the quantum report, without the benefit of underwriting by the ATE provider.”
AJAG was similarly against excluding recoverability for the expert attending court.
It argued that limiting the number of reports to two could be too restrictive, pointing out that between four and six reports is not uncommon when follow-up reports are required to cover new or outstanding issues which arise in the preliminary stages of the claim, or in response to expert reports served by the defendants.
AJAG warned the government against capping the cost of reports, saying that it is a “seller’s market”. The response explained: “The number of experts, particularly in some of the more specialised fields of medicine, who are prepared and sufficiently highly qualified to pass an opinion in a critical report on their peers’ performance is rather limited. This in large part explains why the costs of reports are comparatively high.
“If the expert fees are capped, this small pool of experts could dry up, denying the claimant access to justice by default. It should be for the courts on detailed costs assessments to decide whether an expert’s fee for a report is reasonable and recoverable, particularly bearing in mind the new provisions to be introduced which reinforce proportionality in costs recovery.”
In a previous submission to the Ministry of Justice, AJAG and leading ATE insurer DAS calculated that taking into account the ratio of clinical negligence cases that do not proceed after the initial investigation, together with administrative costs and a 10% profit margin for the insurer, the total premium that needs to be recovered for successful case would be £11,024. Currently, the average ATE stage 1 premium is around £3,000, they said, meaning the proposed system does not produce a viable business model.