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Published On: January 18, 2012 | Blog | 0 comments

Clinical Negligence, legal aid and LASPO

The government’s plans to remove clinical negligence cases from the scope of legal aid were debated again yesterday in the House of Lords in the committee stage of LASPO (the Legal Aid, Sentencing and Punishment of Offenders Bill).

Once again the government came under sustained attack from all sides of the house. Peers were bemused as to the point of such far-reaching changes, potentially removing access to justice from those who have suffered severe injury through negligence at the hands of the state, to achieve estimated savings of just £6 million. Labour peers kept a relatively low profile on this issue, leaving peers with experience of these matters and government backbenchers to make the running. Perhaps most surprisingly these included two old Thatcherite stalwarts Lords Tebbit and Newton. As Lord Newton put it:

I also want to say to my noble friends that when they come across an amendment with the names Newton and Tebbit on it, they are in trouble.

It should be noted that it was the Thatcher government in which they served which in 1989 changed the legal aid rules so that the means test was applied to the child and not to the parents. This opened the way for the successful use of legal aid to obtain compensation in many cerebral palsy cases over the next two decades.

Lord Beecham, pointed out that unusually both claimants and defendants were opposed to the government’s proposals. The National Health Service Litigation Authority had opposed the removal of legal aid for clinical negligence, stating:

We have serious concerns over the proposal to withdraw legal aid from clinical negligence claims.

Many of the peers referred to the independent report from King’s College commissioned by the Law Society which had found that the government’s proposed cuts to legal aid were likely to cost more in their knock-on effect than they would save.

Former Law Lord, Lord Lloyd of Berwick concentrated on the proposed recoverable after the event insurance premium for expert reports on clinical negligence cases. This has been described by Lord Justice Jackson as:

the most expensive and inefficient mechanism which it is possible to devise in order to achieve [the Government’s policy objective].

Lord Lloyd explained why in these cases the premium is likely to cost as much if not more than the sums insured – the high risk of failure and the need for insurers to cover administrative costs, pay insurance premium tax and make a profit. Taking a pragmatic approach to this issue, Lord Faulks also pointed out that just because one legislated for a market did not mean that one would in fact be created.

Lord Faulks also continued his forensic analysis of the government’s claim that cases for brain damaged children would still be allowed public funding under the “exceptional funding” route because of the potential infringement of human rights. He correctly argued that the current jurisprudence suggests otherwise. Both he and Lord Carlile pushed the Minister hard to accept that expressly bringing the cases back into the scope of legal aid would be better than relying upon the discretion of the Director of Legal Aid Casework or judicial review. Whilst not making any concession, the Minister did promise to consider the matter further when scrutiny reaches clause 9 of the Bill, which deals with “exceptional funding”.

As I have previously noted, there is a big difference between bringing clinical negligence cases back into the scope of legal aid and their being funded through “exceptional funding”. Cases fully within the scope of legal aid will continue as now with the costs of the case being paid by the state (and recovered from the wrongdoer if it succeeds) and the damages recovered being retained by the client (subject only to minimal deductions by way of the legal aid statutory charge). Under exceptional funding, such cases will be subject to the supplemental legal aid scheme under which it is proposed that if the case succeeds a fixed charge of 25% of the damages for pain and suffering and for past loss will be paid by the client to the state. This can leave the client in a worse position under legal aid than under a conditional fee agreement. None of the peers in the debate raised this. Hopefully, however, this will be revisited on later scrutiny of exceptional funding and the proposed supplemental legal aid scheme.

And even if cases remain within the scope of legal aid, as my colleague Jon Nicholson has pointed out the changes to disbursement funding for legal aid cases which have already been implemented will in practice marginalise the use of legal aid. It will be difficult to persuade eminent paediatric neurologists to undertake work for £90 per hour for claimants, where the defendant, the National Health Service Litigation Authority, will pay them more than £300 per hour for work on the same case. Without competent experts these difficult cases simply cannot be won.

As is usual, none of the amendments were moved to a vote at committee stage. It does seem very likely that the government will come up with some concessions on legal aid for clinical negligence before the report stage of the bill. It is to be hoped that these are sufficient to enable these difficult cases to continue to be properly litigated.

*Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*

David Marshall

Managing Partner |Injury & Medical Claims |Commercial

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