Clinical Negligence Claims in England and Wales August 2015

News | Fri 21st Aug, 2015

On 16 July I produced an annual summary of the state of the Personal Injury and Clinical Negligence Claims Market in England and Wales, bringing together the figures from various Government bodies: the Courts, the CRU and the NHSLA.

By co-incidence on the same day the NHSLA published its 2014/2015 Annual Review.  18 days later the Department of Health issues a pre-consultation document suggesting that legal fees for lower value clinical negligence claims are disproportionate and should be fixed at a low level.

In this article I summarise the NHSLA’s conclusions, analyse whether the facts are being represented fairly and call on the D of H to avoid discriminating against the poor and the retired. 

1.             The NHSLA annual report 2014/2015 – the New Approach

In his Welcome the Chairman, Ian Dilks, asserted that (p4):

“Currently over a third of what we spend each year is received by the legal profession and as later pages explain, most of this is paid to claimants’ lawyers.”

In her Report the NHSLA’s CE Helen Vernon stated:

“The NHSLA has experienced an increase in the costs associated with clinical negligence claims in recent years” (p8)

“The emergence of non specialist lawyers coupled with excessive claims for legal costs by some firms had required a change in approach.”  (p7)

And also:

“For claims of a lower value, there is a clear need to move to a position where legal costs are more proportionate to damages.” (p7)

2.             What is missing from both the Chairman’s Welcome and the Chief Executive’s Report? 

Whilst the headlines for the newspapers and Parliament in the annual report were all focussed on criticising claimant lawyers, there was no mention in either the Chairman’s Welcome or the CE’s Report of three very encouraging facts.

Firstly:

• That the NHSLA’s net operating costs went down by 27% over the year.
• The figure was £2,641,600,000 (p60, over £2.64 billion) a decrease of £732,700,000 (p60, over £732 million) from the previous year.

That was a massive improvement in the NHSLA performance, a substantial saving in taxpayers money yet it was relegated to page 60 of the report.

Secondly:

The report discloses that the number of claims reported to the NHSLA this year is down on last year:

• 2013/2014:              11,945 claims (p18).
• 2014/2015:              11,497 claims (p18).

This reduction by 3.7% in claims has occurred despite an increase in the number of patients being treated (p8) and in the number of reported incidents (P8).  This is very good news.

Thirdly:

The sum paid out in damages has gone down:

• 2013/2014:              £840,751,934 (p14).
• 2014/2015:              £774,444,135 (p14).

This reduction of £66,307,779 is an enormous saving of 7.9%.  This has occurred in a year when the number of “claims closed” rose from 15,384 to 16,459.  This is also very good news.

Comment

These three facts are good news for the NHSLA and they deserve credit for the. They are good news for the taxpayer too.

It is therefore surprising and disappointing that comment on them is completely omitted from the Chairman’s Welcome and the CE’s Report.

In the new style NHSLA reporting this year the good news is downplayed, a political approach is taken and only the figures which suit the political aims of the D of H  or the Government is put forwards and highlighted.  The aim is clear: to attack the fees charged by claimant lawyers.

This raises the question: is the NHSLA now a political body rather than an independent body fulfilling a vital function in society?

3.             Has there been an increase in the costs associated with clinical negligence claims?

On the NHSLA’s figures more sums have been paid to claimants lawyers to cover fees and disbursements this year (nearly £292 million) than last year (£259 million). Why is this?

To a large extent it will have depended on the number of claims which were settled or lost by the NHSLA this year compared with last year:

• In 2013/2014 the NHSLA “closed”, which I assume means paid out or defeated, 15,384 claims (p19) and paid out £259,252,650 to claimant lawyers.
• In 2014/2015 the NHSLA closed 16,459 (p19) claims and paid out £291,909,829 to claimant lawyers.

Analysis

It is logical to assume that the more cases in a year which are closed the greater the sums which will have been paid out.  Taking the average cost per case from the above figures, in 2013/2014 the NHSLA paid out £16,852 per case.

In 2014/2015 the NHSLA paid out £17,735 per case.  That is an increase of £883 on average per case or 5.2%. This is some justification on a broad brush basis for stating that the total sums paid out on cases lost by the NHSLA are higher but does not mean that the lawyers fees are the reason why.  Court fees have gone up substantially.  One would have to compare the number of high value and low value cases year on year to understand whether this figure has any significance at all.

4.             Is one third of what the NHSLA spend paid to Lawyers?

Taking the NHSLA’s figures:

• the spend on operating costs was £2.641,6 billion (p60), of which £0.291,909,829 billion was paid to claimants’ lawyers.
• In addition £0.103,232,994 billion was spent on defence lawyers (p14/15).

On the assumption that the NHSLA’s operating costs are what they actually spend the percentage spent on lawyers is set out below.

Analysis:

• 11% of the NHSLA was spent on claimant lawyers and
• 4% was spent on defence lawyers.

This totals 15% of the NHSLA “spend” each year, and is not “one third of what we spend” as the Chairman asserted.  Unless I have misunderstood the terminology the Chairman’s Welcome contains a gross factual inaccuracy.

5.             Terminology

The NHSLA persist in calling all of the items on a bill of costs “claimant’s legal costs”. This may not be accurate terminology and may be factually incorrect.  A bill of costs includes or may include the following items:

• Claimants solicitors’ base costs;
• Claimant’s barristers’ fees;
• Success fees (for pre-LASPO cases);
• ATE insurance premiums (for pre-LASPO cases);
• Courts fees and charges;
• Disbursements on travel and misc items;
• Disbursements on experts (experts fees);
• The costs of assessing costs;
• Interest on late payment of lawyers fees;
• VAT.
• Fees unnecessarily incurred by the NHSLA due to the fighting and losing interlocutory applications and the 36% of the trials which they defended (2014/15 annual report p27).

Comment

The NHSLA figures do not distinguish between claimants lawyers fees and these other items.  They should do so.  In seeking to make a political point and criticise claimant lawyers the NHSLA should only do so on the basis of correct facts.

6.             Are claimant legal fees disproportionate in lower value claims?

The chart on page 10 of the NHSLA report is apparently shocking news to the NHSLA and the Government and the D of H and means it is time to take action and kick claimant lawyers hard by fixing their fees at a low level.

In reality it is no surprise to anyone involved in clinical negligence claims, least of all the NHSLA, that comparing the costs and disbursements involved in proving a case with small damages makes the costs and disbursements look disproportionate.

Costs and disbursements on experts are inherently disproportionate for proving a low value clinical negligence claim.   Clinical negligence work is totally different from car crash work.

• For example, to prove a clinical negligence claim valued at £50,000 due to substantial loss of earnings for a business man who has suffered a negligent operation and lost 1 year of work, with say 2 experts on breach and one on quantum might come to £37,200 in total.  Made up of solicitors costs of £15,000, experts fees of £10,000 and barristers fees of £3,000 and court fees of £3,000 and VAT of 20%.
• Preparing the same case for a retired elderly man where the damages may be say £15,000 because he has no loss of earnings, would cost pretty much the same.  The same experts would be required.

As a proportion of damages the costs would be 74% of the business man’s claim and 248% of the retired man’s claim.  This is not a shock horror moment. It is obvious.

Comment

The issue is whether is it right now for the NHSLA to recommend that Government should hobble or destroy all claimant lawyers ability to build good cases for injured elderly members of the public by imposing fixed fees which are “proportionate to damages” but not to the work needed to prove the case.

7.             Conclusions

There is a lot of good news in the 2014/2015 report which shows that the NHSLA operates efficiently and is driving down the drain on the taxpayers purse.

Once the last of the pre-LASPO cases is completed in the next 2 years and success fees and ATE premiums are no longer part of the expenditure of the NHSLA the taxpayer should save a lot more money.

However the 2014/2015 NHSLA Report is no longer a neutral document presenting figures for others to comment on.  The NHSLA’s new reporting approach is tainted with politics and is a concern for all those who believed and still believe that it is a public service rather than a political mouthpiece.

The pre-consultation issued by the D of H on 4^th August is the Government’s first steps towards strangling patients’ rights to sue for clinical negligence if they are poor, old, unemployed or disabled.  It is based on the NHSLA’s report.

I invite the NHSLA to revise and reissue their report with a more balanced set of conclusions.

I invite the Department of Health to reconsider and then withdraw its proposal to fix fees in clinical negligence cases up to £250,000 which will discriminate against the poor and disable them from their common law entitlement to compensation for injury due to clinical negligence.

Andrew Ritchie QC,    21 August 2015