The NHS Litigation Authority (NHSLA) has blamed the pre-Jackson surge and personal injury law firms entering the clinical negligence market for a record number of claims brought against the health service.
It has also accused some firms of front-loading costs and thus avoiding costs management, as well as in some cases of claiming “excessive and disproportionate costs”, leading to an average 29% reduction in bills.
The NHSLA’s annual report said that the number of new claims rose by almost 18% from 10,129 in March 2013 to 11,945 in March 2014, and that before implementation of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 on 1 April 2013, there were “significant marketing campaigns by claimant solicitors to ensure claimants signed up to pre-LASPO no-win, no-fee agreements, which still enable claimant solicitors to charge a success fee on their costs”.
As a result, the “vast majority” of claims reported to the NHSLA in the financial year were under pre-LASPO arrangements.
The NHSLA said changes to funding arrangements have had a “significant impact on our work”. Its annual report explained: “For example, reduced fixed costs in motor personal injury claims have attracted a number of new entrants to the clinical negligence arena as one of the last remaining areas where claimant solicitors can charge an hourly rate, resulting in us having to deal with more than ever new claimant solicitors.
“We have also seen an increase in poorly investigated claims and claims where the care was clearly not negligent being brought by lawyers who do not specialise in clinical negligence work.”
Claims where the care was not negligent accounted for 44% of resolved cases in the last year, the report showed.
The NHSLA said some claimant firms are undertaking “significant investigations” of claims in the pre-litigation period and before notifying the claim, meaning that they are not subject to costs budgeting. This can lead to a “disproportionate” costs claim compared to the damages payable to the claimant.
It gave the example of a letter of claim served with an offer to settle for £11,800. This was accepted less than four months later, only for the solicitors to present a bill for £175,000 of costs incurred beforehand. The NHSLA said it is contesting the bill.
Complaining about instances of “excessive and disproportionate” costs, the NHSLA said in some cases solicitors were charging £400 an hour with a 100% uplift; one firm tried to charge £1,440 an hour.
“There is no evidence that the claimant solicitors’ firms that attempt to charge higher fees are doing a better job for their clients than those that charge lower amounts,” the report said.
Challenges to claimant solicitors’ costs led to an average reduction of 29%, rising to 32% at detailed assessment.
Overall, solicitors claimed £260m in costs on claims resolved in 2013/14, with the NHS ultimately paying out £185m.
The NHSLA’s provisions increased from £22.9bn as at 31 March 2013, to £26.1bn as at 31 March 2014, of which £10.5bn relates to claims notified to the NHS but not yet resolved and claims already resolved as periodic payment orders. The remaining £15.6bn relates to claims which may be brought in the future.
It said the value of provisions “increased primarily due to the increase in the number of clinical claims received during the year”.
NHSLA chair Ian Dilks said: “The NHSLA has retained 100% of its NHS members and has significantly grown its membership, with over 50 independent sector members providing NHS care joining our clinical negligence scheme for trusts in the last year. This is a testament to the hard work, skills, expertise and dedication of NHSLA staff.”