The NHS Litigation Authority (NHSLA) has complained of “an increasing number of plainly excessive and disproportionate costs bills” from claimant lawyers.
With an eye on strengthening the case for the government to cap claimant lawyers’ fees, the NHSLA’s annual report, published on Friday, recorded that it achieved an average 33% reduction in bills, cutting the £326m costs claimed in 2014/15 by £107m.
It also revealed that 46% of claims concluded in 2014/15 were resolved with no damages payment, while the NHSLA successfully defended 64% of cases that reached trial.
The NHSLA received 11,497 new clinical claims in the year to 31 March 2015, a small dip on the year before, which it attributed to the cases signed up during the pre-Jackson rush two years ago finally tailing off.
The report focused on the level of claimant costs for lower-value claims; for claims where compensation was less than £10,000, claimant lawyers recovered an average of £28,436, a figure that has increased steadily from £11,281 a decade before. Defendant lawyers were paid around half the sum in issue on average.
The report also said that for cases worth up to £100,000, claimants’ legal costs represented 52% of the claim value, up from 32% in 2004/5. There was no comparative figure for defendant costs.
In all, 66% of clinical negligence expenditure went on damages, 25% claimant costs and 9% defendant costs.
However, annual expenditure on clinical negligence claims actually fell marginally in 2014/15, but the NHSLA said this did not account for future periodical payments agreed during the year, while “the financial impact of the high number of claims received during 2013/14 is likely to be seen in 2015/16 and beyond, when those claims fall for settlement”.
The NHSLA also deals with non-clinical claims made against the health service and the report said “the success of fixed costs in reducing excessive and disproportionate legal bills for employers’ and public liability claims should not be overlooked”.
The mediation scheme launched by the authority last year “has attracted interest from claimants’ solicitors and other stakeholders”, the report said. “However, there has been some reluctance on the part of claimants’ solicitors to agree mediation.”
As at 31 March 2015, the NHSLA had made offers to mediate in 65 cases and nine mediations had taken place; 14 offers to mediate have been accepted.
The NHSLA is constantly criticised by claimant lawyers for delays in settling cases. It said on average clinical claims are resolved in 1.31 years, while those valued under £25,000 take less than 12 months.
Chief executive Helen Vernon said: “The claims teams and our legal panel firms constantly strive to strike the difficult balance between the need to pay compensation to those who are entitled to it and to defend the NHS and public funds from unjustified claims.
“In a challenging legal and financial environment this has proven to be an increasingly difficult task. The emergence of non-specialist lawyers coupled with excessive claims for legal costs by some firms has required a change in approach.
“This year we contested a high number of cases to trial and challenged numerous claims for claimant costs at detailed assessment, achieving significant savings for our members.
“We recognise that we are seeing a divided legal market and it is important that those who suffer injury are able to obtain high-quality legal representation at a reasonable cost. For claims of a lower value, there is a clear need to move to a position where legal costs are more proportionate to damages.”
She added that clinical negligence claims “place increasing pressure on the health service, frontline staff, our members and ultimately, patients”.