Global insurance broker Lockton has held talks with 17 NHS trusts interested in insuring themselves privately and leaving the NHS Litigation Authority (NHSLA), it has emerged.
Mark Riley-Pitt, senior vice-president of global insurance brokers Lockton, told Litigation Futures that private insurance “could be cheaper”, although the trusts’ liabilities under the current scheme would have to be dealt with.
“Monopolies aren’t good,” he said. “They stifle competition and innovation. Innovation, and providing solutions to problems is something the insurance industry is good at.”
Mr Riley-Pitt said France had its own version of the NHSLA, which continued to exist. However, French hospitals had been allowed to insure themselves privately for the last few years and some did, including in London.
“Insurers make a profit by managing risk,” he said. “I’m not overly impressed by the way the legal community gets a hammering on the litigation aspect of risk.
“Someone has to represent these clients. The length of time taken for people to get redress is something that everyone is responsible for. Even when liability is not disputed, there can be terrible delays in agreeing quantum.
“There are some cases where fees are disproportionately high, but there is normally a reason why. If we were more robust in tackling delays, it could make a significant difference financially.”
Mr Riley-Pitt added that the Department of Health’s plans to cap fees for medical negligence cases was “potentially a knee-jerk reaction”.
A spokesman for the NHSLA said: “We are aware that brokers who wish to break into the clinical negligence market will actively market alternatives. We do not know whether and how this may be backed in the long term.”
He said the NHSLA understood that the cover currently being marketed by was “not on a like-for-like basis” and came with conditions, limits and costs which were not a feature of the non-profit making and state-backed clinical negligence scheme for trusts (CNST).
“We are committed to working with our members to make sure that their indemnity cover and the services we provide meet their needs,” he said.
“CNST works on a pay-as-you-go basis, which ensures that money is not tied up in reserves for future claims or diverted to insurer profits and additional costs such as insurance premium tax.
“Members benefit from a state-backed scheme which removes the uncertainty and high risk associated with an insurer who may or may not remain in the clinical negligence market.”
In a separate development, well-known medical negligence specialist Hudgell Solicitors has published detailed facts and figures challenging the Department of Health’s plans to impose fee caps for low-cost cases.
In one case a client suffered cuts to her mouth and tongue when she attended hospital for adjustment of a brace. The firm sought an admission of liability and a £2,500 settlement for pain and suffering.
Senior solicitor Simon Wilson said it took 15 months of legal proceedings before the trust involved offered a settlement of £1,000 to the client, which was accepted. Mr Wilson said the total cost to the public purse was £13,800.
In another case, a patient developed skin issues after treatment on a cyst on her hand. “Less than two months after proceedings were served – but more than two years after the initial letter of claim was sent – the trust involved finally made an offer of £8,000 compensation, before settling at £10,000 after further representation.”
Mr Wilson said the total legal costs over two years included fees of £32,500, including counsel’s fees of £4,300 and insurance costs of £7,650.
“This was one of the relatively low-value claims that the government is claiming is down to ‘excessive charging’, but this was clearly not the case.
“Had the trust settled early on, the only costs would have been a records fee of £100, a liability and causation report fee of around £1,150 and a condition and prognosis report of £450. You are looking at thousands of pounds worth of avoidable costs.
“Interestingly, in that particular case, the offer of settlement was actually made before a defence was ever filed, evidence in itself that it was always going to be a difficult case to defend, so why drag it all the way through a legal process until proceedings are served. It basically suggests they were hoping the claim would simply go away and the patient give up.”
Mr Wilson added: “There is a lot being said about excessive charging and capping the legal costs in medical negligence cases, but there is a real danger here that the NHS will simply be able to deny all allegations they face, knowing it won’t be worth the time for solicitors to take on cases due to limitations on how much investigation they can put into a case.”