The total abolition of recoverability for medical negligence insurance premiums is the option justice ministers “really want to go for”, a leading after-the-event (ATE) insurer has warned.
David Pipkin, underwriting director at Temple Legal Protection, also predicted that “many, many” medical negligence claimants would not be able to pursue their claims if recoverability was abolished.
Speaking at the PI Futures conference in Manchester last week, Mr Pipkin described how managers at Temple “were called up for a meeting with a headmaster” at the Ministry of Justice (MoJ) at the end of August.
“Abolishing recoverability completely is clearly top of their menu and the one they really want to go for,” he told delegates.
Mr Pipkin said the Department of Health, which is due to launch a consultation on fixed fees for medical negligence cases in November, and the Ministry of Justice, which is discussing with ATE insurers whether it should scrap the limited LASPO exemption for these claims, had decided to run their consultations in parallel.
He said the MoJ’s preferred timetable for changing the recoverability rules for ATE premiums was 12 months.
“We were also told that there were very few options on the table to go into the consultation: Abolishing the recoverability of clinical negligence premiums altogether; restricting recoverability to cases above whatever the fixed cost limit was – which could be anything from £25,000 up to quarter of a million.
“The third option was that the premium could not actually be recovered if the lawyers had not obtained a medical report. Frankly, that is very rarely the case – we’ve had perhaps a dozen instances or so of that happening. That isn’t what this is about.”
Mr Pipkin said the MoJ might add the further option of introducing a ‘notice period’ before recoverability became effective as was done in defamation cases, where a 42-day period during which defendants would be allowed to make admissions and make an apology was introduced. But he said this would not work in medical negligence, where defendants would rarely, if ever, be able to make admissions that quickly.
Mr Pipkin said there were “valid” reasons why limited recoverability had been preserved by LASPO. He predicted that if recoverability was completely abolished, most clients would not be able to pay for premiums.
“I believe there won’t be a market because we, as ATE insurers, can still sell it but I don’t believe clients will be able to afford to buy it. Do the lawyers want to pay for it?”
Mr Pipkin said Temple would do its best to be innovative and remain in the market, but it needed lawyers to stay involved and the firm could not sell insurance to litigants in person.
“It’s doom and gloom, looking 12 months to two years into the future, if we lose recoverability altogether. Many, many clinical negligence claimants won’t be able to pursue their claims.”
Litigation Futures revealed in July that the MoJ was considering changing the rules on recoverability for ATE premiums in medical negligence cases. An e-mail from a civil servant linked “reforming the arrangements” for ATE insurance to the Department of Health review of fees.