Written evidence submitted by Michael Powers QC and Anthony Barton (NLR0004)




In 1975 the NHS annual spend on clinical negligence was about £1 million. By 1995 it was around £150 million, the contingent liability around £1 billion. The figures are now £2.2 billion annual spend and £83 billion contingent liability. There is widespread concern at the cost of clinical negligence. This represents money which could otherwise be spent on patient care. There must be drivers for this huge increase other than medical injury.


There is widespread concern that the process of compensation for medical accidents is dysfunctional and needs reform. It has been said in Parliament:


Can we really go on with the exponential rise in costs to the NHS - a system in which it loses 80% of cases that reach the courts, and where huge delays take place in patients getting access to an outcome? The system is completely bust. We need a new one and I hope that the Minister will, with his colleagues, consider what action needs to be taken to improve the current situation...” (Lord Hunt of Kings Heath, HL 14 January 2021 column 951)


This submission considers: how to achieve reform? It is in two parts:


  1. Briefing notes on clinical negligence.


  1. Response to the Health and Social Care Committee’s inquiry.


The challenge is to provide a system of investigating and compensating medical injury which is fair, rigorous, proportionate, accessible, and accords with economic and political reality. It must balance the interests of individual injured patients against the public interest.


Part one: Briefing notes on clinical negligence




Negligence is denoted by a breach of duty causing injury - there is no specific law of clinical negligence; it is part of common law tort and is of general application. The burden of proof is on the claimant, the standard of proof is the balance of probability.


The test of liability in negligence is based on the doctrine of reasonableness; this is itself based on norms of acceptable medical practice.


Damages in negligence are compensatory; they are intended to place the victim in the position he would have been in if the tort had not been committed. However, such expenses must be reasonably incurred.


The NHS usually requires proof of breach of duty causing injury where it pays compensation.

The economic drivers of litigation: how lawyers are paid


Clinical negligence litigation is a commercial activity like most civil litigation - as is clear from the advertising for claims. An important driver is the pursuit of legal fees; litigation is only indirectly related to compensation, patient safety, and professional regulation.


The conduct and cost of litigation are influenced by the behaviour of lawyers; the behaviour of lawyers is influenced by how they are paid.


The striking feature is the asymmetry in how claimant and defendant lawyers are funded. Claimant lawyers are privately funded; NHS lawyers are publicly funded. There is also inequality of resources between the parties.


Three quarters of cases are funded by conditional fee (no win, no fee) agreement; just one per cent of cases are funded by legal aid (see Lords written answer, 28 April 2021 [HL15043]). This is payment by result; there is no reward for failure. It imposes commercial discipline and economic prudence. Case selection is critical; many cases are investigated at no cost to the taxpayer in order to find a sustainable claim. Investigation is rigorous as claims must satisfy forensic scrutiny according to accepted legal tests.


Access to justice is free at the point of need and is available to all. The system is self-funded from the recovered legal fees of successful cases.


By contrast NHS lawyers are paid win or lose (see Commons written answer, 30 January 2018 [125048]). This provides perverse incentives to maintain unsustainable defences, and promote “deny delay defend” behaviour. It is reward for failure. Damages are paid by the NHS in 80 per cent of litigated claims (see Lords written answer 18 August 2021 [HL2215]). How many of these cases could have been settled without resort to litigation?


The issue has been raised in Parliament:


... Is the Minister concerned that, by paying NHS defence legal costs regardless of the outcome of the claim, the Government are creating perverse incentives that reward “deny, defend, delay” behaviours by lawyers?” (Lord Storey, HL 3 March 2020 column 504)


The Government does not audit the quality of decision making by NHS lawyers (see Lords written answers 22 January 2020 [HL258], 19 March 2021 [HL14012]).


To put it in colloquial terms:Money matters - understand how the money moves to understand how the system works. Manage the money and things fall into place.


The costs rule


The usual rule for costs liability is the “loser pays” rule, or “costs follow the event”; it is of general application. It promotes resolution of cases according to merits; strong claims are encouraged to settle, and weak cases are discouraged. It deters speculative litigation.


It does not apply to the claimant in clinical negligence cases;qualified one-way costs shifting” in practice protects the unsuccessful claimant from costs liability. It puts a claimant in no lose position, and the NHS defendant in a no-win position. It distorts the mutuality of risk between the parties. It is another asymmetry in the economics of litigation. Claimants in effect enjoy risk free litigation with respect to own costs and opponent’s costs. It can operate to promote commercial settlement by defendants to limit irrecoverable costs rather than according to the merits. 


Law Reform (Personal Injuries) Act 1948


Section 2(4) of the Law Reform (Personal Injuries) Act 1948 provides:


In an action for damages for personal injuries (including any such action arising out of a contract), there shall be disregarded, in determining the reasonableness of any expenses, the possibility of avoiding those expenses or part of them by taking advantage of facilities available under the National Health Service…


The effect of this provision is to compensate on the basis of private health care provision where NHS care is available. It is a limited statutory exception to the common law rule that expenses are reasonably incurred.


Altering the legal basis of compensation for medical injury


Altering the legal basis for compensation requires a change in the substantive law; it requires primary legislation. There have been at least two attempts to enact legislation to introduce no fault compensation; these included:


Compensation for Medical Injury Bill (Harriet Harman) 1990.


National Health Service (Compensation) Bill (Rosie Barnes) 1991.


These attempts failed; the political consensus was that compensation should remain fault based.


There have been attempts to limit the liability of doctors using innovative medical treatments:


Medical Innovation Bill (Lord Saatchi) 2014


Access to Medical Treatments (Innovation) Bill (Chris Heaton-Harris) 2015; the clauses dealing with liability for medical injury were discarded which enabled it to be passed.


Attempts to reform the system of compensation by altering the basis of liability have been unsuccessful. Debate has confirmed the flexibility and utility of negligence liability. It is the process of compensation that needs reform (see below).


The NHS Redress Act 2006


The NHS Redress Act 2006 was the culmination of concerns expressed over two decades ago about clinical negligence litigation (see: “Handling clinical negligence claims in England”, National Audit Office, 3 May 2001; “Clinical Negligence: what are the issues and options for reform?”, Department of Health, August 2001; “Handling Clinical Negligence Claims in England”, Commons Committee of Public Accounts, 22 May 2002; “Making Amends”, Department of Health, June 2003). 


The preamble to the Act includes the following:


An Act to make provision about arrangements for redress in relation to liability in tort in connection with services provided as part of the health service in England or Wales; and for connected purposes.


The Act is concerned with liability in tort; it is essentially about negligence, though this word does not appear on the face of the statute.


The purpose is to provide redress “without recourse to civil proceedings”. The Act provides at section 3(2):


…redress ordinarily to comprise -


(a) the making of an offer of compensation in satisfaction of any right to bring civil proceedings in respect of the liability concerned,


(b) the giving of an explanation,


(c) the giving of an apology, and


(d) the giving of a report on the action which has been, or will be, taken to prevent similar cases arising…


The focus of Parliamentary debate was that the redress scheme envisaged the health service investigating itself. It was described thus:


“… a dog’s breakfast… a replication of the machinery of the courts, but without the independence or procedural safeguards that the courts afford to a litigant.” (Earl Howe, 21 November 2005 GC 359).


In adversarial litigation both parties investigate the claim. The Act is enabling (framework) legislation. It has accomplished nothing. 


The government has no plans to implement the NHS Redress Act 2006 and has made no recent assessment of it (see Lords written answers 18 January 2021 [HL11819, 11820]).


The Pre-action Protocol and Civil Procedure Rules


The Civil Procedure Rules are a “procedural code with the overriding objective of enabling the court to deal with cases justly and at proportionate cost”. The basic principle is “litigation should be a last resort”. The rules include “so far as is practicable…ensuring that the parties are on an equal footing”.


Part two: Response to the Health and Social Care Committee’s inquiry.


The Committee invites written submissions addressing any, or all, of the following points: 


Response of Michael Powers QC and Anthony Barton


There is widespread belief that the present growth in the cost of clinical negligence litigation is not sustainable. These responses are informed by the clinical negligence briefing notes:


  1. The tortious basis of liability is established in law and the law of negligence operates in many common law jurisdictions. There is no reason to change the legal basis of liability; this would require primary legislation. History has shown that attempts to do so have failed. This is the political and legislative reality.


  1. The law is of general application; all sectors and activity should be subject to the same rules of liability. Moreover, it is not the basis of liability that needs reform but the process of compensation.


  1. Negligently injured patients are rightly entitled to redress. The adversarial system provides robust, rigorous, independent review of patient care according to clinical norms. It is self-funding and free at the point of need. Litigation rightly has a central role in investigating and compensating medical injury. It is necessarily fault based; emotive language like “blame culture, “ambulance chasing”, and “compensation culture” is unhelpful and inaccurate.


  1. There is marked asymmetry in funding and costs exposure between claimant and defendant. This influences the behaviour of lawyers in the conduct of the litigation; there is scope for savings in the process of litigation:


(a)                 Pay NHS lawyers by conditional fee in cases where proceedings are issued because liability is in issue. Claimant lawyers work under such conditions.


(b)                 Remove qualified one-way costs shifting for claimant - make claimants liable for fixed, capped, or a proportion of successful defendant’s costs. There is no reason why claimants should enjoy completely risk-free litigation; insurance products for such costs exposure have been previously available.


(c)                 Abolish legal aid; or alternatively retain it only for expert reports.


(d)                 Limit fees for experts acting for claimants and defendants.


(e)                 Fixed or capped costs for both claimant and NHS lawyers in low value cases. Apply to all cases on a “swings and roundabouts” basis.


(f)                  Reduce recoverable insurance premiums for cost of expert reports.


(g)                 Where liability is admitted and/or an offer is made pre-issue, compulsory extension of limitation to facilitate settlement to avoid litigation.


These suggestions accord with the basic principles of the Civil Procedure Rules.


  1. Repeal Law Reform (Personal Injuries) Act section 2(4). This provision is legally anomalous. Its repeal was Recommendation 17 of “Making Amends” in 2003. A claimant has a duty to mitigate his/her loss and where an equivalent (or better) NHS provision is available he/she should not be able to recover the cost of a private health provision.


  1. Many of the points on which the Committee invites comment are addressed in the NHS Redress Act 2006 (and raised in the reports leading up to the Act). The Committee should review the Act and consider why it has not been implemented. Why recreate afresh a failed statutory scheme?


Michael Powers QC

Anthony Barton


Michael J Powers is a practising barrister and former medical practitioner and coroner.


Anthony Barton is a solicitor, qualified medical practitioner, and former coroner.


Michael Powers QC and Anthony Barton are joint editors of the sixth edition of “Clinical Negligence” (in preparation).


Oct 2021