Health minister Ben Gummer has announced plans to cap the fees charged by lawyers on medical negligence claims worth less than £100,000, saving the NHS up to £80m a year.
He accused some lawyers of “unscrupulously” loading “grossly excessive costs” onto the NHS and spoke of imposing “financial controls” on legal fees.
“Safe, compassionate care is my upmost priority and to achieve this, the NHS must make sure every penny counts,” Mr Gummer said.
“Unscrupulously, some lawyers have used patient claims to load grossly excessive costs onto the NHS and charge far more than the patient receives in compensation.
“Our One Nation approach is about being on the side of hardworking taxpayers and these financial controls will ensure money is pumped back into patient care.”
In a briefing note, the Department of Health said Mr Gummer had outlined the plans after writing to the Master of the Rolls, Lord Dyson.
The department said claimant lawyers charged the NHS Litigation Authority £259m in legal fees for 2013/14. It said the NHSLA had saved over £74m by challenging excessive costs last year, but “strict limits on legal bills” would help them further.
The department claimed that lawyers could charge “extortionate fees” for low-cost cases because there were no limits. It gave an example of £175,000 being paid in fees for a case where a victim received compensation of only £11,800.
In another case, fees amounted to £80,000 to obtain only £1,000 in damages, though the court reduced the costs to £5,000.
The department said that, under the proposals, the “lawyer’s fee would reflect a percentage of the compensation received by the patient so that it is proportionate.”
Clinical negligence specialist David Marshall, managing partner of Anthony Gold and former president of the Association of Personal Injury Lawyers, said the suggested limit of £100,000 did not sound like a “lower value” medical negligence claim.
“We are talking about serious incapacity, not about something that is over in a few months or even a year,” he said. “We are talking about a permanent condition that needs to be investigated properly.”
Mr Marshall said quite a significant number of medical negligence claims were for less than £25,000, yet there was no portal or fast-track procedure equivalent to those used for other forms of personal injury.
“You can’t just fix costs without changing the process,” he said. “All that would mean is that claims can’t be brought or can’t be brought properly.
“You could come up with a streamlined system for simpler, smaller medical negligence cases. This sounds like running before you can walk.”
Mr Marshall said there had been an increase in medical negligence claims, but the total was still “tiny” compared to the number of other personal injury claims.
He added that the increase in compensation paid out by the NHS was linked to an increase in more serious cases.
A spokeswoman for the Department of Health said the details of the scheme would be developed after a “period of engagement with stakeholders and a formal consultation”.