Fixed recoverable costs in clinical negligence: The claimant’s voice needs to be heard
In January of this year, the government’s Department of Health and Social Care [“DHSC”] opened a consultation on fixed recoverable costs [“FRCs”] for lower value clinical negligence claims. It remains open for responses until 24 April 2022. The consultation comes off the back of a report by a working group of the Civil Justice Council on the subject[1]. Both claimant and defendant groups made representations into that report, but the government’s consultation document and accompanying impact assessment display a concerning lack of attention to the interests of claimants.
How Might Fixed Recoverable Costs Negatively Impact Claimants?
It is worth outlining the reasons why practitioners have raised concerns that FRCs, in every practice area, might have a negative impact on claimants. The argument against them goes something like this; FRCs are inevitably not set high enough to enable claimant solicitors to recover all their time costs, all of the time, from defendants. Therefore, there will always be cases where the amount of legal work that the case requires (to be well organised, presented and pleaded) exceeds the solicitor time costs that are recoverable from the defendant. What then happens is one or more of the following things:
- Claimant solicitors recover their costs shortfall from their clients’ damages;
- Claimant solicitors put less time into lower-value work than is required to win and/or properly value the claim, and so claimants lose more often or are awarded less in damages (conceivably, this could lead to a rise in professional negligence claims against claimant solicitors [2]);
- Claimant solicitors run lower value cases at a loss (which runs the risk of firms going out of business, meaning fewer lawyers are available to do this kind of work [3]); or
- Claimant solicitors stop taking on lower-value work.
In all of these outcomes, the result is that claimants receive less damages or may struggle to find legal representation at all.
Given these concerns, shared by many representing claimants in the legal profession, it seems reasonable to hope that the government will, whenever it is considering policy around fixed recoverable costs, have the interests of claimants and access to justice at the forefront of its mind. Unfortunately, the substance of the DHSC’s consultation suggests that it does not.
How was this Decision Made?
Firstly, to take the headline issue – the solicitors’ set rates that are being proposed; the DHSC has adopted the defendant group’s suggestions without a hint of compromise with the claimant group’s. The defendants’ suggested rates are, unsurprisingly, much lower than the claimant’s (four times lower for certain sections of the new scheme). It would be helpful to have some explanation as to why the government has taken the defendant’s side wholesale on this most important issue, but the consultation document says only that the government thinks that the defendant group’s proposals represent:
“the most reasonable assessment of the work involved at each stage of the streamlined processes designed by the CJC, whilst protecting the access to justice of claimants and furthering the common goal of rapid resolution.”
There is no further analysis provided.[4] This is despite representations from the Bar Council that:
“particular weight should be attached to the views of claimant solicitors, who are best placed to determine whether the balance between the steps involved in the scheme and the level at which the fixed costs are set is workable and viable.” [5]
Arguably, the lower the recoverable rates, the greater the four risks in my numbered list above, and the worse it will be for claimants.
Functional Problems with the New System for Lower Value Claims
Secondly, there appear to be functional problems in the proposed new system. The DHSC says that the proposed new “Light Track” and “Standard Track” offer a “streamlined” way to manage lower value claims, one which will enable claimant solicitors to achieve the same results for their clients in less of the time. However, both the claimant group and the Bar Council have pointed out that the system (in the initial stages at least) in fact requires a greater amount of work on the part of claimant solicitors. This is because, under the proposed “Standard Track,”[6] claimants will be required to serve an expert report on breach and causation, witness statements, details of loss and supporting documentation, (“if applicable”) a report on condition and prognosis, and an offer to settle all at the same time as the Letter of Claim. All this, despite the fact that research suggests at the moment only 8.72% of cases settled before court allocation required the claimant to serve any factual or expert evidence on liability. [7]
This is a huge amount of additional work to do without so much as a whisper from the defendant, and often before it has been possible to confidently evaluate the claim’s prospects of success. This level of risk may prove unacceptable to claimant firms, driving them away from lower value clinical negligence work. [8]
This is also bad news for claimants themselves. It means that claimants must “show their hand” before the defendant, putting them at a disadvantage in the litigation and potentially meaning their evidence will have to be revised (at further cost) once the defendant has made its evidence available. Furthermore, the Society of Clinical Injury Lawyers has pointed out that if condition and prognosis reports must be served before agreement on liability then ATE providers are likely to make these reports non recoverable; these costs will therefore eat further into claimants’ damages.[9]
Fixed Recoverable Costs for Fatal Injuries
Thirdly, the exclusions. Despite the representations made by the claimant group, it is proposed that the scheme will include fatal claims. Claims involving stillbirths and neonatal deaths are, fortunately, excluded, but the remainder of people who die because of negligent medical care may have their claims subject to FRCs.
I have blogged previously about the problems in the compensation system for fatal injuries and this will only make matters worse. Fatal injury claims are always tragic, and they put an onus on practitioners to give a personal as well as a professional service. They are often complex, too, and frequently require additional work such as assisting with probate or attending inquests.[10] I fear that the introduction of fixed recoverable costs will add further pressure to practitioners working in this difficult area, and that this pressure may (whether in monetary terms or otherwise) be transferred to claimants.
There were other points I could have made about this consultation – and we await a full response from AvMA which will probably be comprehensive – but those issues stood out as particularly worthy of comment.
If this blog has sounded all doom and gloom, I apologise; the consultation is, of course, only a consultation. Whatever policy the government decides to implement has yet to be drawn up. It may well be some time before we see any actual changes in the law, and if enough people and representative bodies respond to the consultation (which of course I encourage everyone to do here) then perhaps this may prompt a rethink around some of the issues I have outlined.
References
[1] Fixed Recoverable Costs in Lower Value Clinical Negligence Claims. Report of the Civil Justice Working Group
[2] In my short time as a trainee solicitor doing Personal Injury claims, I worked on a professional negligence claim that arose from this very problem.
[3] This has unfortunately already started to happen in the personal injury sector: https://www.lawgazette.co.uk/news/pi-firm-flying-high-a-decade-ago-goes-into-administration/5110936.article
[4] The Impact Assessment does list individuals claimant as an affected group. For reasons I cannot fathom, however, they are not included in the table of “Net impact of monetised benefits and costs” on page 15 of the Assessment.
[5] Bar’s position statement, para 2 Appendices to CJC report
[6] Fixed Recoverable Costs in Lower Value Clinical Negligence Claims. Report of the Civil Justice Council Working Group, p.24. The Standard Track applies where liability is in dispute, estimated to be 75% of all claims.
[7] Appendices to CJC report. SCIL position statement, s.3 “The Process”
[8] Ibid. Bar’s position statement, para 24. A)
[9] Ibid. SCIL position statement, s.6 “After the Event Insurance” (ATE)
[10] Ibid. SCIL position statement, s.2 “Exclusions”
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