The government is considering whether to extend its plans to introduce fixed recoverable costs (FRCs) for clinical negligence cases to all cases up to £250,000, rather than £100,000, it has emerged.
A recently published paper from the Department of Health (DoH) said that “the intention is to apply FRCs to all cases up to £100,000 damages although it is exploring whether to consult on a limit of £250,000”.
The paper went to last month’s meeting of the Civil Procedure Rule Committee (CPRC) with draft amendments to part 45 of the CPR to give effect to the introduction of FRCs from 1 October 2016.
It said: “We wish to explore the possibility of consulting on claims up to £250,000 because costs remain disproportionate and there appears to be some support amongst senior judiciary for this limit. Initial estimates suggest a further £25m pa could be saved; however, we need to conduct further analysis of the evidence before including this in the formal consultation.”
The NHS Litigation Authority (NHSLA) has estimated that it could save around £80m a year if FRCs are introduced for claims up to £100,000.
The paper said the government wanted to act because, “in the experience of the [NHSLA], significant costs are often incurred by claimant lawyers in the pre-litigation and pre-notification period and are not subject to costs budgeting requirements. There is also evidence of claimant solicitors attempting to claim costs well in excess of the current guideline hourly rates, and considerably higher than the NHSLA pays its defence solicitors.
“This results in a disproportionate costs claim compared with the damages payable and means that more money is paid to lawyers – in lower value claims – than to the patients who were harmed by negligent care.”
It said that claimant legal costs for cases closed in 2013/14 amounted to 273% of damages awarded in claims between £1,000 and £10,000; 153% for claims between £10,000 and £25,000; 107% for claims between £25,000 and £50,000; 74% for claims between £50,000 and £100,000 and 54% for claims between £100,000 and £250,000.
Ahead of a public consultation in the autumn, the DoH said it planned to write to stakeholders in the defendant and claimant sectors, and to patient groups, for their views before finalising the proposals and the accompanying impact assessment.
This will include their comments on a range of potential methodologies for deriving the level of FRCs for each tranche of claims, including the application of legal aid rates versus guideline hourly rates, or the use of a ‘sliding scale’.
Minutes of the CPRC meeting reported concerns among members that an upper limit of £250,000 would have a major effect on other rules.
“In particular the view was expressed that a mechanical approach might not be appropriate in lower value complex cases with a number of experts, and there should remain a residual judicial discretion. The committee agreed that consideration must be given to possible exceptions.”
As reported first on Litigation Futures, the minutes also confirmed that the Ministry of Justice is looking at the recoverability of after-the-event premiums in respect of medical experts in clinical negligence cases.
“The consultation would relate to the abolition of the recovery of ATE premiums or an alternative measure to restrict recoverability, together with the issue of recovery of fees where a medical report is not obtained,” they said.