Costs budgeting is starting to work in clinical negligence and government plans to introduce fixed fees in ‘lower-value’ cases worth up to £250,000 are moving too far and too fast, a Queen’s Bench Master has warned.
Master Cook said claims of more than £50,000 could not be classified as lower value and before extending fixed costs beyond that figure, “the current costs regime should be reviewed and its effects should be subject to proper scrutiny and research”.
He added: “The inevitable conclusion to be drawn is that there is now a very strong momentum perhaps an irresistible momentum towards the introduction of fixed costs in civil claims. But in my view change should not be driven on the basis of out of date statistics and the short-term financial interest of the NHS.”
His speech to a seminar at 7 Bedford Row in London came almost exactly a year after another lecture at the chambers in which he had expressed concern about the burden of budgeting in clinical negligence cases.
With a backlog building up, last year costs budgeting was temporarily disapplied for clinical negligence, and Master Cook said that following the appointment of one extra full-time master and four deputy masters, it will resume from the end of this month, with waiting times for first case management hearings “reduced to a few months”.
He continued: “The experience of the clinical negligence masters is that there are now signs that parties are adapting to the costs management process. We are seeing a significant increase in the number of cases where budgets are agreed or where a number of the phases are agreed.
“By requiring the parties to focus on the total budget per phase and requiring cash offers to be made where agreement cannot be reached the arguments are more focused. This leads to shorter hearings and in return enables more efficient use of court resources.”
However, there were also “some unwelcome signs”, such as an increase in the number of litigants in person. “I do not pretend that this increase in the number of litigants in person involves substantial numbers but it is something we have not really encountered before and to my mind it raises questions about whether these claimants are able to access effective legal advice.”
He said masters were also seeing a rise in the number of non-specialist firms attempting to move into the clinical negligence field, adding to the costs of the process.
Master Cook questioned the NHS Litigation Authority’s (NHSLA) apparent belief that fixed costs could save it more than a quarter of the costs it pays out to claimant solicitors.
“I don’t intend to submit these claims to detailed scrutiny. There is a respectable case to be made that the NHSLA has presented the statistics in a less than neutral fashion,” he said, referring the audience to Andrew Ritchie QC’s article last year on the NHSLA’s annual report.
“What I can say is that the figures used to support the NHS’s argument that claimant’s costs are disproportionate in lower-value claims are derived from the pre-costs management regime. Also left out of account as drivers of costs is the conduct of the NHSLA and hospital trusts.”
Master Cook noted that the Department of Health consultation on fixed costs, which was initially due last autumn, has still not been published, even though the planned implementation date of 1 October 2016 remains unaltered.
“It must also worthy of note that case for fixed fees was presented to the [Civil Procedure] Rule Committee by Mr Masterson of the commercial division of the Department of Health.
“I would suggest that such a state of affairs is profoundly worrying and does nothing to instill confidence in the proposals. What I find particularly concerning is how the NHSLA’s concern over disproportionate costs in ‘lower value claims’, that is claims valued up to £25,000, has morphed into a proposal to fix costs in cases up to £250,000.”
The process of running a clinical negligence cases “has a cost which means that establishing a low-value claim will always proportionally higher than a more substantial claim. I would certainly be slow to describe a claim worth £50,000 to £100,000 a low-value claim”.
This applied also to Lord Justice Jackson’s recent call for the widespread adoption of fixed costs, although he agreed with Sir Rupert that introducing fixed costs for clinical negligence on their own would lead to unhelpful “Balkanisation”.
He concluded: “My own view for what it is worth is that if this change is to come about: it must apply to all civil litigation; it must be gradual; we must start by extending the low-value part 45 scheme to all claims including the fast-track; there should be gradual extensions of fixed costs from £25,000 to £50,000 to say £150,000 and such extensions should be made in the light of experience; suitable uplifts must be agreed for difficult and complex claims such as clinical negligence, possibly in conjunction with some form accreditation scheme; alternatively, there must be some flexibility in rates (judicially controlled for difficult and complex cases); and there must be a robust and predicable mechanism to update rates paid to lawyers linked to actual costs in the real world…
“Unless fees are set at a level which make it economically viable to take on such claims, people will be denied representation…
“The past five years have seen an unprecedented period of change in the way in which civil claims are funded there has been much change in the legal market, there have been mergers and spectacular failures.
“In my opinion a period of calm is called for before more radical change. We do not have a system of justice that is worthy of the name unless people can get effective redress.”
An NHS Litigation Authority spokesman said: “We would agree entirely with Master Cook with respect to his comments on the entry of non-specialists into the clinical negligence market and the difficulties this creates in the resolution of claims.
“It is important that injured patients obtain access to justice at reasonable cost and that excessive costs are challenged appropriately in order to preserve NHS resources for patient care. This is why we have drawn attention to clear evidence of disproportionate costs being claimed, particularly on lower-value cases.”
Julie Say, a partner and head of clinical negligence at London law firm Hodge Jones & Allen, said: “It is heartening that the judiciary is contributing to the analysis of the current proposals for fixed fees in clinical negligence claims. Master Cook is echoing concerns about the flawed basis of the proposals together with ignoring cost management already carried out by the courts.”