Claimant lawyers have strongly criticised government plans for a new administrative compensation scheme for birth injury claims, with the Association of Personal Injury Lawyers saying that families would “be held hostage” under it.
Though welcoming some the principles behind the ‘rapid resolution and redress’ (RRR) scheme – which aims to significantly reduce the amount of litigation that currently takes place – various respondents to the Department of Health’s consultation were especially critical that it did not guarantee access to independent legal advice throughout.
They also opposed the idea of NHS Resolution (the new name for the NHS Litigation Authority) running the scheme, saying it should be independently run because of the risk of conflicts of interests.
APIL argued that the scheme would “pressurise families out of pursuing funds they desperately need for long-term care”.
While recognising that it might be appealing for families when faced with the prospect of litigation, APIL president Brett Dixon said: “While we support promises of early investigations, apologies, and shared learning in the scheme, the approach to damages is crude when compared to the proper assessment of a child’s needs which comes with litigation.
The scheme would pay 90% of an average court settlement, which Mr Dixon said would be “far away from the correct level of compensation for most families”.
He continued: “Under the scheme, parents will be expected to attend initial meetings about their baby’s injuries without any independent advice or support.
“If they change their minds later and opt to pursue compensation through the courts, rehabilitation and therapies already in place will be withdrawn.
“The scheme will apply a factory-style process to dealing with injured children, putting their futures on a metaphorical conveyor belt. And once parents have bought into the scheme they will be held hostage by the terms.”
APIL’s response expressed disappointment that Department of Health officials had not taken on board concerns it expressed as the plan was being formulated, in particular the lack of guaranteed legal advice until stage two of the process, when talks about compensation begin.
It added: “APIL also raised concerns that the scheme lacks provision for any award under the scheme to be approved by the court and for there to be a deputy to manage the injured child’s funds and ensure their needs are met…
“We are concerned that this scheme will ultimately be litigation’s poor relative. If the threshold for compensation is the same as that for a claim in negligence, it is difficult to see how, if given proper independent advice to make an informed choice, a family would choose the rapid redress scheme over litigation.”
The Law Society response said the RRR scheme would “not bring about the benefits that the department hopes for. We believe that enhancing the existing processes is more likely to deliver the department’s vision, and will not require the necessary expenditure of this proposed scheme”.
It too noted “a distinct absence of appropriate lawyer involvement throughout both stages of the scheme”.
The response continued: “Although it is beneficial that the scheme offers an alternative to litigation, we fear that meritorious cases will continue to favour the litigation route, which would have a detrimental impact on the outcomes of the RRR scheme and its financial viability.
“The department will only see strong uptake in this scheme if its outcomes match those of a litigated case. Currently, there is scarce incentive for a strong case to go through the scheme, particularly when damages are estimated to be approximately 90% of a litigated settlement.
“The real saving for the NHSLA will be a decrease in the number of claims and early settlement of claims, not just a decrease in lawyer costs.”
The society also called on the government to underpin the policy with robust evidence, specifically: undertaking a like-for-like comparison with the Swedish model the RRR scheme is based on; a pilot to test the scheme and indicate uptake; an assessment of the impact of changes to the discount rate; and a study that guarantees consistent and reliable funding for reassessments.
In its response, which echoed many of the points made by APIL and the Law Society, London law firm Hodge Jones & Allen cautioned that the scheme might actually cost more than the current system.
It said one of the key assumptions underlying the scheme was that as the number of avoidable incidents fell, so in turn would costs – but evidence from Sweden did not support this.
“We are of the view that the introduction of this scheme has the potential to cost the Department of Health more in the long term. Those with weaker claims will go through the scheme in addition to those who have stronger claims who will litigate in order to achieve 100% compensation.
“There will be increased costs from providing compensation greater than the universal state offer to an increased number of people, and savings from fees on reduced litigation are likely to be eclipsed by the cost of administering the scheme.”
The firm welcomed the notion of early upfront payments but said would need to be far higher than the suggested figure of £50-£100,000 to help families deal with the child’s immediate needs, such as putting a care regime in place, purchasing equipment, and arranging suitable housing.
Agata Usewicz, head of medical negligence at Hodge Jones & Allen, said: “We support any initiative that makes it easier for families to receive the support and compensation they need, and there are positive features in what the Department of Health has proposed.
“However, it requires a lot more thought if it is to deliver its laudable aims, never forgetting that there must be no erosion of access to justice for these families. Independent legal advice should be available to the families from the outset and throughout the process.
“It is vital that any scheme is first piloted, and a full impact assessment undertaken, to assess the impact of any reduction in harm, and the extent of any costs savings.”