Legal costs now account for 55% of the value of clinical negligence claims worth less than £100,000, by far the highest on record, the annual report of the NHS Litigation Authority has revealed.
In response, it is now working to establish a permanent mediation service after a successful pilot.
The costs figure – which was 35% in 2005/6 – will add more fuel to the government’s proposal for fixed fees for ‘low-value’ clinical negligence claims, the consultation on which is expected soon.
The report showed that the NHS paid out more than £1.4bn to patients and their legal representatives in 2015/16, up from £1.1 bn.
It said the rise reflected the high numbers of new claims received over recent years which were now falling for payment, although last year new claims fell by 4.6% to 10,965. A 43% increase in claimant legal costs – from £292m to £418m – was another significant factor in the rise. Defence costs rose 16%, from £103m to £120m.
At the same time, the number of cases resolved without paying any damages reached a new high of 4,935.
Fewer than 1% of the claims resolved went to trial, although the actual number increased from 85 to 124. The NHSLA maintained its 60% trial success rate.
The report said: “We continue to target overcharging by claimant law firms, challenge bills and points of principle at court, and report poor practice to the Solicitors Regulation Authority as appropriate. We also ensure that our legal panel is instructed at agreed hourly rates or fixed fees appropriate to the value of the case.”
Spending on non-clinical claims – such as slips and trips in hospitals – was more stable, which the report said “may be at least in part because the claimant legal costs of lower-value claims in that area were fixed from July 2013”.
Among the NHSLA’s initiatives to improve the claims process were a bespoke IT interface with the employers’ and public liability claims portal “to increase the benefit of the fixed costs regime applied to the claims in this area”, while “this year saw us develop an in-house litigation team to further reduce the cost of outsourcing litigated cases to external solicitors”.
The authority has been piloting a mediation service focused on fatal and elderly care claims. “The pilot was evaluated positively and in the coming year will extend and expand the service as a result. We hope that this will increase the number of disputes resolved without going to court. In a sample of 47 cases where mediation was completed, 81% were settled without the need for a potentially costly and upsetting court case.”
It is now undertaking work to establish a permanent NHS LA mediation service. This will involve a formal procurement exercise inviting tenders from organisations and individuals to join a panel.
“It is our experience of the cases we have mediated both under the pilot and throughout our history that mediation is a powerful forum, giving the injured person the opportunity and the ‘voice’ to articulate the basis of their case and other related concerns which is not possible at a meeting with just lawyers,” the report said.
“It is also a good setting to explain why a legal liability has not been established to justify a financial payment.”
The report also set out the NHSLA’s increasing role in supporting and incentivising NHS organisations to improve patient safety, including through learning from clinical negligence.
Chief executive Helen Vernon said: “The key to reducing the growing costs of claims is learning from what goes wrong and supporting changes to prevent harm in the first place.
“We want to reduce the need for expensive litigation. This means increasing the use of mediation in the NHS, early transparency, saying ‘sorry’ and demonstrating that lessons have been learned to prevent the incident happening again.”