NHS negligence claims down but claimant costs “continue to spiral”

Vernon: tackling the multiple drivers of claims costs

The number of clinical negligence claims continues to fall, but costs pay-outs to claimant lawyers rose again by 19%, the first annual report of NHS Resolution (NHSR) – the new name for the NHS Litigation Authority – has revealed.

It also hit back at claims that it is slow to settle damages, citing figures that showed how the level of damages sought are significantly higher than the level actually agreed.

In the year to 31 March 2017, the number of new clinical negligence claims fell 2.5% to 10,686, which continued the decline since the 2013/14 high caused by a rush of claims before LASPO came into force.

Claims numbers dropped at the lower-value end, but NHSR recorded a “steep increase” in the number of claims lodged in the £50,001 to £100,000 tranche as well as an increase of a lesser magnitude in some of the higher-value ranges”.

Overall provision for claims against the NHS now stands at £65bn – a figure that has risen sharply in recent years – in light of the changes to the personal injury discount rate and also the discount rate used for calculating its liabilities.

NHSR paid nearly £1.1bn in damages to clinical claimants, up 14%, while claimant legal costs were a shade under £500m. Defence costs rose by a more modest 5% to £126m.

By contrast, claimant legal costs for non-clinical claims – such as slips, trips and falls – were 21% lower at £19.7m, which NHSR attributed to “the continuing impact of fixed recoverable costs for this area and efficiencies in the claims process”, even though damages went up 15% to £30.7m.

The Department of Health has yet to announce whether it will introduce fixed recoverable costs for cases worth up to £25,000; NHSR wants a £100,000 threshold.

The report repeated the NHSR’s complaint that claimant legal costs “have, over time become increasingly disproportionate to damages, particularly for lower value claims”, but said 2016/17 was the first year to see it go down slightly – costs in cases worth up to £100,000 now represent 53.5% of the total claim value, down from 54.8%.

The report said NHSR used the recent tender for its defence panel to introduce a pricing structure focused on early investigation “so that we can avoid formal court proceedings wherever possible”.

It also procured its first mediation panel during the year. “Getting the lawyers on both sides engaged in mediation has been challenging but the panel has already been active in building interest with some encouraging early signs,” the report said.

On the oft-heard criticism that NHSR does not settle damages quickly enough, the report said: “We recently tested this theory by undertaking two studies of random case samples.

“The studies showed that in 99% of litigated cases, the claimant’s lawyer had failed to notify the value of damages being claimed until after they issued formal court proceedings.

“Furthermore, in the first study, involving 61 mainly low-to-medium-value litigated claims, £13.3m had been sought against £4.8m paid.

“In the second sample, involving 10 very high-value claims, £109m was sought against £76.6m paid. The studies demonstrate the importance of exercising due diligence when dealing with damages claims.”

Of the 17,338 claims concluded during the year, 37.7% ended before proceedings were issued with no payment of damages, and 30.1% with damages. A quarter settled post-proceedings with damages, and just 6.1% without. Some 121 cases went to trial, with damages awarded in 49 of them.

In all, 55.8% of cases concluded with a payment of damages.

NHSR chief executive Helen Vernon said: “Our review highlights the extent of the financial challenge that negligence presents to the NHS.

“This year we launched our new five year strategy, Delivering fair resolution and learning from harm, which sets out how we will tackle the multiple drivers of claims costs and how we will work with our partners to help prevent harm from happening in the first place.

“By supporting NHS trusts to be candid and manage concerns fairly and openly when things go wrong, we hope to jointly deliver the learning which goes hand-in-hand with any claim for compensation.”

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