Reform of clinical negligence claims
Posted on 13th July 2017
The recent proposals by the MDU and MPS to reform clinical negligence claims have featured in the legal press in recent weeks. The MPS in particular appears to have started a major PR campaign to push their desired agenda. The have produced a glossy media campaign called “Striking a balance”.
Broadly speaking, both companies appear to be suggesting the following reforms;
- “Repeal 70-year old legislation which obliges defendants to pay for a bespoke private sector care package. It should be possible for defendants to buy NHS and local authority care packages for claimants with long-term needs which would boost NHS funds for the benefit of all patients.
- Introduce mandatory fixed limits on legal fees in medical negligence claims settled for up to £250,000.
- Introduce a cap on future loss of earnings compensation.
- Reform the way the discount rate is calculated to more accurately reflect the way personal injury claimants invest lump sum compensation payments.”
My response would be as follows;
1. The fact that the Law Reform (Personal Injuries) Act 1948 is 70 years old is not good evidence of its obsolescence. The Magna Carta is over 800 years old but still contains some good law – such as the right to a fair trial and a ban on arbitrary detention. So the MPS’s argument that this part of the Statute Book is outdated is not a sound argument in my view, The Law Reform (Personal Injuries) Act 1948 enables injured claimants the freedom to choose who cares for them after an accident instead of the MDU/MPS proposal of a care package being imposed by the NHS. The parents of a severely disabled child currently have the freedom to hire carers as they see fit. This is important to the family. The NHS cannot guarantee continuity of care with the same carers in same way that a private care package can. Many families need and want this sense of control in their lives. That freedom to choose carers would be lost if the MDU/MPS proposal was enacted as law.
2. “Introduce mandatory fixed limits on legal fees in medical negligence claims settled for up to £250,000” – the effect of this would mean that many “lower value” claims of up to £250,000 would never be brought. Medicine, like other professions is fragmented in areas of highly specialist knowledge. Because expert witnesses can only give evidence in their own area of medicine it is not unusual for a complex claim to require a large number of experts. The number of experts is determined by the facts of the case, not the value of the claim. The more experts involved in the case the more is required to prepare the case for trial. The more work required, the higher the legal fees. The MPS/MDU proposal is contrary to the view of Lord Justice Jackson, who told the Association of Personal Injury Lawyers conference in May 2017 that there were ‘considerable difficulties’ in applying a fixed costs regime to clinical negligence multi-track claims valued more than £25,000.
The Medical Protection Society also refers to a survey that they commissioned from YouGov. 2034 members of the public were apparently surveyed between 9-10 February 2017. The results were that;
- 82% disagree that lawyers should receive more money in legal fees than the patient does in compensation for clinical negligence claims against the NHS.
- 75% agree the UK government should do more to reduce the amount of money lawyers are able to claim from the NHS in legal cost / fees in relation to clinical negligence claims.
- 81% support fixed costs so that legal costs are lower than compensation pay outs.
I think this obvious problem with this survey is that the general level of knowledge around this issue in the general public is not great. This is not a subject that can be explained quickly in soundbites. The one person who has studied this issue in microscopic detail for the last 8 years is Lord Justice Jackson. He has chaired countless meetings, read hundreds of pages of submissions from various parties and produced a 584 page report. His view is that fixed fees for clinical negligence case worth over £25,000 (not £250,000) is not feasible if there is to be access to justice and equality of arms.
The fact that the MDU and MPS now appear to hold Lord Justice Jackson’s views as less valid that 2034 members of the general public is disappointing, to say the least. To me it suggests that they have lost the academic argument.
3. The MPS Strike the Balance report also states that “Currently damages awarded are based on the claimant’s weekly earnings, and this means that for a similar claim, higher earners can receive more from the NHS in compensation than lower earners”
Again, we appear to be faced with a populist, emotional appeal from the MPS which appears to be suggesting that “higher earners” are somehow wrongly in a privileged position simply because they have a job that pays a higher salary than another claimant.
The idea of compensatory damages, i.e. damages that put the injury party back in the position he/she would have been in , had the negligence not occurred, is not a new one. The Romans were the first on record to abide by this legal principle and they called it restitutio in integrum. The first recorded case where integrum restitutio was ordered by a Roman court was 59 B.C.
So are we really saying that the current condition of the UK legal system is so bad that a legal principle over 2000 years old must now be ditched? I think not.
4. The discount rate argument – In 2001 the Lord Chancellor, stated that he would “review the discount rate whenever I find that there is a significant and established change in the relevant real rates of return to be expected”.
The size of Claimants’ damages are linked to a Government index called Index Linked Government Gilts (“ILGS”). Since 2001 the net average yield of ILGS has fallen. By August 2012, the yield on ILGS had been declining for some time, falling under 1% – a long way below the 2.5% set by the Lord Chancellor.
Despite the promise to keep things under review, the Lord Chancellor left the rate unchanged for 16 years. It was not until February 2017 that the then Lord Chancellor, Liz Truss, finally announced a new discount rate.
So for 16 years Defendants have received windfalls, paying damages to Claimants using a 2.5% discount rate which the courts, the actuaries, the Claimants and the Defendants all knew was not correct. The MPS proposal seeks to force Claimants to gamble with their compensation and invest in property or risky shares. Their proposal would leave them exposed to risk taking with money that they need to pay for care for their loved one for many decades. A stock market crash as seen in 1987, 2001, 2008 would potentially destroy the care budgets of many severely disabled Claimants.
The MPS/MDU campaign seeks to restrict access to a lawyer for so called “low value” claims of up to £250,000 and to reduce the value of legal claims by overturning long established legal principles. Unfortunately by proposing such extreme changes to our legal system they have, in my view, overreached themselves and failed to adopt a balanced view of how the system could be restored.
One proposal that could cut costs at a stroke would be to put all NHS GPs and dentists under NHS CNST (clinical negligence scheme for Trusts). This would save significant costs.
This would mean that claims against GPs could also be settled on a Periodical Payment Order basis – unlike the current situation where they cannot give the requisite security and this leads to the MDU/MPS being forced to make a lump sum payment – perhaps of several million pounds.
Putting GPs and dentists would significantly reduce the costs and complexity of claims involving multiple defendants – claims involving patients seeing a number of different GPs in the same surgery are very common. I am often involved in cases where some GPs are covered by the MPS, some by the MDU, and perhaps the patient has been to hospital as well. So we end up with three sets of lawyers, experts and counsel on the same claim. They are all dealing with essentially the same points. There would of course be no conflict because the client is NHSR rather than the individual; doctors or nurses.
If all NHS treatment claims were dealt with by NHS Resolution, with damages payable by PPOs, the costs savings could be immense. Perhaps this type of organisational change could be considered before patient’s rights are eroded further.