The working group charged with agreeing fixed recoverable costs (FRCs) for clinical negligence claims worth up to £25,000 has been unable to do so, although it has made progress on process changes.
Most radically this includes introducing mandatory neutral evaluation to promote settlements.
The Civil Justice Council (CJC) group – made up of representatives of all interested parties – was commissioned jointly by the Ministry of Justice and Department of Health and Social Care, and was initially meant to report a year ago, but for various reasons this proved impractical.
It has published the figures put forward by the claimants and defendants blocks on the group, and has now passed resolving the differences on to the government.
The group’s chair, Andrew Parker, a CJC member and head of strategic litigation at defendant firm DAC Beachcroft, said: “The majority of the working group has been able to agree on some things, but not to conclude an agreement on the level of fixed recoverable costs.
“In the end the difference between the positions of the claimant and defendant groups on the level of costs is not a large one, reflecting the efforts on both sides to come up with realistic proposals and to do their best to narrow the gap.
“It is to be hoped that this report will form a meaningful basis for further consultation by the government.”
Mr Parker stressed that the importance of such a consensus, even though not complete, “cannot be underestimated”.
He added: “Inevitably the outcome is a compromise – but one which I believe is in the best interests of all parties concerned in such difficult cases.”
He emphasised that the streamlining of the claims process was proportionate when the sums at stake were modest, “but should in no way be taken as a feasible option for larger-value claims”.
The working group’s newly published report features a scheme built around a standard track and a light track, the latter designed for claims that incur fewer legal costs, because liability is not in dispute.
An analysis showed that a quarter of cases settled pre-issue without requiring any expert evidence on either breach and causation or condition and prognosis.
Certain categories of case which were likely to be complex, such as those with multiple defendants, or sensitive claims like stillbirths, would be excluded from the new system.
The standard track would begin pre-issue with a letter of claim accompanied by an offer to settle. The defendant would have to send a letter of response outlining their case and responding to the offer within six months, to which the claimant would have a right to reply.
The claimant would retain responsibility for obtaining and sorting the medical records, but the records required would be limited.
There would be sequential exchange of experts’ reports and witness statements, as long as appropriate safeguards were put in place – a minority of the claimant group, including the Society of Clinical Injury Lawyers (SCIL), did not agree with the concept of sequential exchange.
Defendants said it would enable them to weed out claims which would otherwise be presented speculatively, while opponents on the claimant side feared that requiring the claimant to submit their expert evidence before seeing that of the defendant’s expert would put them at a significant disadvantage.
The report said: “We believe that this is addressed by the defendant only being able to defend the claim if they follow the same cards on the table discipline and within a strictly defined period.”
There would then be a mandatory ‘stocktake’ and discussion if the case could not be settled after the reply, with mandatory neutral evaluation (MNE) – carried out by a barrister from an approved list – if the case has not settled after the stocktake.
The parties would not have to accept the outcome of MNE, but there may be part 36-like costs consequences for a party that presses ahead to trial and fails to better the MNE.
The report said the use of single joint experts would amount to a determination of the case and so was not appropriate.
“However, an evaluation by a specialist barrister would have the advantage of providing an early and cost-effective assessment of the issues in dispute, but without necessarily determining the dispute should either party reject the assessment and decide to proceed to trial.”
On the light track, the letter of notification would contain more information on alleged liability and quantum. The defendant would have eight weeks to confirm that the claim would be settled on a full liability basis, without the need for expert evidence on breach and causation, or it would revert to the standard track.
The group did some work on agreeing template letters of claim, response and notification. “Given more time, we would expect it to be possible to agree templates for all three letters.”
It added: “The belief is that, by encouraging early exchange of expert and other evidence pre-issue, the proportion of cases which settle pre-issue should be increased.”
The group was unable to agree changes post-issue, but said that, if MNE worked as intended, it would “remove the need for changes to post-issue process and resolve some more difficult issues about pre-issue process, where we cannot offer alternative solutions”.
A fixed fee would be paid to the evaluator for an MNE. The Bar, supported by the claimant representatives on the working group, recommended £2,000 for liability and quantum evaluations (defendant representatives proposed £1,750) £1,500 for liability only (defendants said £1,250) and £1,500 for quantum only (defendants said £750).
The FRC put forward by the claimant and defendant groups on the working party were:
The report said: “SCIL suggest that FRC at the level proposed (especially those from the defendant group) will drive lawyers out of the market and leave claimants either acting as litigants in person or in the hands of claims farmers or unregulated representatives.
“This is pure speculation and is difficult to follow: the level of costs proposed by the defendant group will generate at least £7,000 costs on average and the claimant group’s figures are higher. We feel justified in saying that with costs at this level, specialist firms are likely to stay in the market they already occupy.”
Given the focus on process improvements and legal costs, the working party did not “make much headway” on experts’ fees or the recoverable cost of after-the-event (ATE) insurance.
There were “real concerns” that fixing levels of fees might either leave claimants bearing the additional cost or reduce the number of experts willing to take on cases.
It added: “The sequential disclosure of experts’ reports could have a positive effect on costs overall, without necessarily increasing the work done by experts, as long as there are adequate safeguards.”
Given the recent Court of Appeal ruling on recoverable ATE in clinical negligence claims, “there was little purpose in the CJC attempting further enquiry or analysis in this difficult field”.