Fixed recoverable legal costs for clinical negligence claims under £25,000 – consultation begins

On Monday 30 January the Department of Health published its long-awaited consultation paper on introducing fixed recoverable costs for clinical negligence claims. These would be mandatory for all clinical negligence claims (i.e. applying to claims arising in the health service as well as in other/private treatment settings) valued between £1,000 and £25,000 and the consultation includes detailed costs figures.

Approximately 80% of all claims settled for damages against the NHS in England in 2015/16 fall within this range. It is also at these relatively lower levels of damages that the disproportionality of claimant legal costs appears at its greatest – the consultation reports that in these cases total claimant costs are more than double, 220%, the damages awarded. The consultation will close on 1 May 2017.

The consultation also proposes radical changes to how lower value clinical negligence claims are handled, advocating early the use of single joint experts or early exchange of expert evidence at the pre-action stage to encourage early negotiation and settlement. It is worth noting that the consultation documents include a draft pre-action protocol and civil procedure rules, which are described as “illustrative”.

The overall suite of measures is designed to streamline the litigation process, supporting quicker and more cost effective resolution for all parties, and to improve patient safety by supporting opportunities for early learning of lessons and redirecting NHS funding into front line service provision. The Department of Health estimates that the measures proposed in the consultation could release savings of approximately £45 million per annum by 2020/21.

One possible risk of the Government’s proposals could be a ‘two-tier’ system. Lower value cases would involve early exchange of expert evidence or single joint experts to facilitate early negotiation and settlement. Higher value claims would continue with the current approach of exchange of expert evidence late in proceedings, making early meaningful negotiations difficult. However, if the early exchange of evidence proves successful in lower value claims, it seems fairly likely that there would be appetite to extend this approach – if not necessarily fixed recoverable costs – to higher value clinical negligence claims.

A further area of concern is cases worth somewhere around the £25,000 threshold of the new scheme. Claims below that figure will require pre-action disclosure of expert evidence and will be subject to fixed recoverable costs (FRCs), whilst those above will not. Whether a case falls within the “illustrative” pre-action protocol, requiring early exchange of expert evidence,  will depend upon the claimant’s valuation of the claim at the outset. On the other hand, the applicability of FRCs will likely depend upon the settlement value when the claim is resolved.  There is, unfortunately, the real prospect of satellite litigation and technical challenges involving cases on the boundaries of the proposed new approach.

It is worth noting that the latest consultation was published on the closing day for responding to Lord Justice Jackson’s latest review of fixed costs across all types of civil litigation. It seems that both of these related activities will run in tandem for the next few months. The Department of Health’s consultation closes on 1 May 2017 and the Jackson review’s final report is due on 31 July 2017.

There is three months between these two dates – coincidentally, the period in which we would normally expect to see a post-consultation response emerge from the Department in charge – which might be a welcome sign of some possible joined-up activity here?

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Written by Alistair Kinley, director of policy and government affairs and Judith Davison, associate at BLM

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