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Government accepts access to justice arguments and caps fixed costs for clin neg at cases worth £25,000

O’Shaughnessy: legitimate concerns about access to justice

The government has today finally published its plans to introduce fixed recoverable costs in clinical negligence cases, and in a victory for the claimant industry proposes to limit them to cases worth up to £25,000.

The Department of Health (DoH) estimated that this would “release a saving of approximately £45m per annum by 2020/21”.

Litigation Futures first reported last October [1] that this was the direction in which the DoH was moving, having originally suggested [2] in summer 2015 that the limit was going to be cases worth at least £100,000 and maybe as much as £250,000.

“We have taken into account legitimate concerns about access to justice”, wrote health minister Lord O’Shaughnessy in the introduction to the consultation [3].

As well as lobbying by the Law Society, Association of Personal Injury Lawyers, Society of Clinical Injury Lawyers and Action against Medical Accidents, the DoH was influenced by an evaluation it commissioned from well-known academic Professor Paul Fenn.

Professor Fenn’s analyses of legal costs have underpinned the introduction of fixed costs in the civil justice system over the past 15 years, and he told the DoH: “The arguments put forward for extending the scope of the fixed cost tables beyond £25,000 in value are not persuasive.”

The DoH said awards of between £1,000 and £25,000 – around 60% of all claims settled by the NHS – encompassed the greatest disproportionality between claimant costs and damages, with claimant recoverable costs 220% of the damages awarded.

“Our proposition is that the disproportionality and the time taken to settle are not in the best interests of either the patient or the taxpayer,” the consultation said.

The DoH has not put forward actual figures but is seeking views on the methodology that will sit behind them. There are four options, three based on an estimation of legal time required under a streamlined process, and the other based on current market costs.

The Mail on Sunday, which claimed the reforms as a ‘victory’ for its campaigning, yesterday quoted health secretary Jeremy Hunt as saying: “What we often see in lower cost claims is a deeply unfair system where unscrupulous law firms cream off excessive legal costs that dwarf the actual damages recovered.

“We believe this creates an adversarial culture of litigation, which is inflating insurance premiums and drawing away resource from the NHS.”

The paper also cited a “government source” saying that Mr Hunt wanted the cap to come into force by the autumn.

The consultation also proposes: