Written evidence submitted by Thomsons Solicitors (NLR0018)
Thompsons is a UK-wide law firm with a network of offices across the UK, including the separate legal jurisdictions of Scotland and Northern Ireland. We are the largest trade union and personal injury law firm in the UK and specialise in personal injury and employment law for trade union members and their families but also (in personal injury claims) for private clients. At any one time we can, as a firm, be handling over 50,000 cases.
As a matter of principle Thompsons has always, since its creation 100 years ago this year, acted only for the injured never for the employer or insurer. The medical negligence team at Thompsons Solicitors therefore works exclusively for medical negligence clients, using our wealth of experience to maximise their damages in this specialist area of law.
The dedicated team includes solicitors who are members of the Law Society’s Clinical Negligence Accreditation Scheme and/or of Action Against Medical Accidents’ (AvMA) referral panel.
The firm participates regularly in government consultations, on a wide range of issues relevant to our clients.
Introduction
As a firm, we are fundamentally opposed to the expansion of fixed costs and believe that there are no grounds for their introduction in clinical negligence claims.
The National Audit Office Report published in 2017, “Managing the cost of clinical negligence cases in trusts”, confirmed that the management of solicitors’ costs was only one of many issues to be addressed. It found that early intervention, learning from past cases and settlement at an early stage could be just as important. Since that time we have seen little change in the management of clinical negligence claims and too many cases are still settled only after the issue of court proceedings.
It would be totally unacceptable to place a cap on damages for the victims of clinical negligence claims. This could mean that someone who suffered a catastrophic injury as a result of negligence at birth, received less in damages than someone who suffered similarly severe and long lasting injuries in say a workplace accident. The injuries and their consequences may be the same yet one would be treated differently from the other.
The only way to reduce the damages and costs paid out in clinical negligence cases is to reduce the number of negligent incidents and to learn from the outcome of previous cases.
Simply reducing the costs recovered by claimants’ solicitors for the victims of clinical negligence would undoubtedly reduce access to justice for victims.
Introduction of fixed costs
Fixed costs have been introduced and expanded over the last decade in personal injury (PI) cases and we have seen their negative impact on access to justice for injured victims with a resulting increased inequality of arms between the claimant and the defendant.
In clinical negligence, the introduction of fixed costs has the potential to create even more harm than in mainstream PI.
Clinical negligence cases are generally too complicated and unpredictable for fixed costs to be appropriate. Firstly, in the majority of PI cases, the process of evaluating the merits of the claim and its value to the claimant is reasonably straightforward. However, in any clinical negligence case, lawyers and claimants must usually obtain at least two medical reports before any sensible assessment of the claim’s merits can be made. This means the time taken to advance a claim can be lengthy and can vary considerably between two cases of apparently similar value and complexity.
A fixed costs system in clinical negligence would apply unfair pressure on claimant-side lawyers to make overly quick decisions on cases, potentially causing lawyers either to proceed with a case without sufficient evidence - thereby falsely raising the injured person’s hopes - or to decline to act in cases that are genuine but challenging. It could also lead to letters of claim being submitted without a full investigation, which in turn could increase the number of cases reported to the NHSR and therefore increase their costs, rather than reduce them.
Since the introduction of fixed costs in PI cases, we have seen a general trend of junior staff doing more of the work on cases to ensure that cases can still be run financially viably. A similar trend in clinical negligence cases would see more junior staff dealing with matters that properly need a high degree of senior legal professional input. This is not protectionism or elitism but practicality and best practice if we all want a first-class efficient justice system. It would be a dereliction of a solicitor’s duty to their client in what are always highly complex cases, it would mean injured victims may not get the full compensation they are due or claimants having to pay additional costs from their compensation for work that was unnecessary - funds that should be for them to invest in their ongoing care and treatment needs.
The consultation refers to the fact that most clinical negligence cases of fast track value are allocated to the multi-track, in itself clear evidence of the complexities involved. And given that these cases become subject to costs budgeting and therefore the costs are closely managed by the court a fixed costs regime is unnecessary unless it is thought that the courts are failing to dealing with costs appropriately.
The fast track consultation document introduced in 2017 proposed excluding infant fatalities from any fixed costs regime. This however was only the “tip of the iceberg” and the fact is, that the majority of clinical negligence cases are complex and cannot be dealt with quickly or under a “fixed cost” system.
Value of a clinical negligence case does not always tally neatly with complexity. For example a significant number of fatal cases (not necessarily infant fatalities) do not have a high value because of the lack of any dependency under the Fatal Accidents Act. These cases are often very difficult to pursue and often strenuously defended by the NHS. Fatality cases are invariably complex, both legally and emotionally, and where families have lost a loved one through negligence it must be right that their solicitors should be able to recover reasonable, necessary and proportionate costs.
NHS litigation costs
The government’s consultation in 2017 suggested that the proposals were being brought forward in order to bring down NHS litigation costs - money which could otherwise be spent on key clinical services. We agree that more money must be put into frontline services. Nevertheless, the fact that litigation costs are rising while funding for the NHS is falling, in real terms, is no coincidence. Highly-trained medical professionals are being asked to work increasingly long hours, with less rest time and more patients to treat. The pressure on doctors and nurses is extraordinarily high. This is an environment which makes mistakes more likely yet the government’s proposals are not addressing these fundamental dynamics: they will only punish the already wronged patient a second time.
The government should be properly funding the NHS and training and employing more staff and investing in better equipment to ensure that fewer patients are injured in the course of their treatment. This would be the most effective and sustainable way of reducing the cost of clinical negligence litigation.
Furthermore, in the first instance a claimant in a medical negligence case initiates the process through advancing a complaint which the NHS can investigate and respond to. If liability is admitted, the costs of advancing a case on breach and liability are avoided. If the NHS is really interested in avoiding unnecessary costs they should embrace this part of the procedure rather than forcing legal cases to be pursued.
We would like to see the NHS make better attempts at resolving matters when complaints are made. As it stands the system is so slow and laborious many people do not bother with the process at all. A clear system which sets out response periods would be helpful both to the NHS itself and those who have been affected.
The case against fixed costs may be summarised as follows:
a) It is morally right that when someone has caused injury they should meet not only the compensation for the injury but also the full reasonable, necessary and proportionate costs incurred by the victim in obtaining proper damages. This is the basic principle of social justice - “the polluter pays”.
b) Fixed costs remove the financial incentives on insurers to ‘behave’ in litigation. Where defendants can run all manner of fanciful arguments with no fear of punishment through increased cost liability, a perverse incentive is created to deny the undeniable and contest the unarguable in order to force claimants’ solicitors to incur costs which cannot be recovered. If the application of fixed costs is to be extended, we submit that it must be done in association with a mechanism allowing for exit to a standard costs regime which is applied routinely (and not just in ‘exceptional’ cases), to ensure proper, reasonable and consistent costs are recoverable. Factors such as conduct, complexity and public importance would need to be some of the relevant considerations.
c) One of the major problems with fixed costs as introduced over the last decade or more in PI is that they are just that: fixed. Once figures have been set, they have tended to stay at the levels at which they were introduced, meaning that the amounts recoverable (already set at low levels) dwindle away in real terms over the years making the work ever less commercially attractive and eventually unsustainable.
d) It is notable that those fixed costs already applied have elicited changes in the legal services market place. A dramatic squeeze on firms’ operating models has led to ever greater consolidation and alternative ownership models which move away from traditional, small and medium, solicitor-owned firms in favour of large, corporate-led entities which may be managed far more aggressively with external and often overseas capital in order to seek swifter, higher returns for corporate investors. This in turn has led to firms going out of business or getting into major difficulties.
e) Some unscrupulous lawyers unfortunately respond to fixed costs by under-settling cases rather than pursuing them rigorously and thoroughly in the best interests of their clients. Such behaviour allows for an unfair competitive advantage against more professional rivals by the recovery of the same fixed costs for less work done. This is precisely what happened in the fixed cost regime miners’ compensation schemes where Thompsons’ average damages were up to 300% higher than other major firms’.
f) On conclusion of a matter, if the defendants do not agree with any costs claimed, they have the right to challenge them by way of the Detailed Assessment process and can recover the costs of doing so if they make an early offer which is not beaten on assessment. In our experience the defendants engage with this procedure and a tiny proportion of cases (less than 5%) proceed to a formal Detailed Assessment by the court. To us, this is evidence of an effective, robust system. The cries by defendants that the system is flawed and that we need the simplicity and certainty of fixed costs are, for us, no more than pleas for special treatment by using fixed costs as a means for the lowering of recoverable costs.
g) Much of the money paid out by clinical negligence defendants in legal costs does not consist of solicitors’ profit costs, but rather of expert fees, court fees and after the event (ATE) insurance premiums. Frequently, insurers benefit from high costs through extortionate ATE premiums which bear no resemblance to the actual figure necessary. So while the legal sector is being attacked for high litigation costs, we would suggest that there should be increased focus on insurance premiums. It should be possible for the NHS Trusts to try to conclude matters at an early stage, before an ATE premium has been taken out.
h) The National Audit Office Report in 2017 confirmed the work carried out by Lord Justice Jackson, who published his review of civil litigation costs in July 2017. This emphatically stated that fixed costs would not be suitable for most clinical negligence cases over £25,000. This is still the case and it would be better for costs to be reduced by the NHS making admissions at an early stage during the complaints procedure or within the pre-action protocol.
Multi track cases
The original fixed costs Rules were intended to apply to fast-track value cases up to a value of £25,000. That meant that difficult multi-track cases were being caught by fast-track fixed costs. Following the case of Qader v Esure Ltd [2016] EWCA Civ 1109, amendments to the Rules were set to clarify that fixed costs do not apply to multi-track claims. Briggs LJ, giving judgment in Qader, made a direct suggestion that the Rules Committee revisit the wording of the fixed costs Rules. He proposed that they add the words "…and for so long as the claim is not allocated to the multi-track…" to avoid any doubt that has led to the changes which took effect on 6 April 2017. This is helpful in cases which begin in the portal but then end up being allocated to the multi-track. In those circumstances fixed costs would not apply.
As part of the April 2017 changes, all references to “but not more than £25,000” have been removed so cases allocated to the multi-track which settle for less than £25,000 would be excluded from fixed costs. Many clinical negligence cases would be fast-track value but, because of their complexity, would be multi-track if issued. On such cases, fast-track costs should not apply. The reason why they have been allocated to the Multi Track will be because the Judge considers them to be complex in nature.
Professor Fenn of Nottingham produced an assessment of claimants’ solicitors’ costs in 2017 and produced a matrix. The mean cost to a solicitors’ firm for a non-litigated case is £6,063.05. As shown in Professor Fenn’s research showing clinical negligence claims against the NHSLA which were closed between April 2012 and April 2016, there were 3,257 pre-issue cases worth under £25,000, therefore total expenditure is £20m for profit costs. This does not tally with the matrix for fixed costs in other civil claims. It must therefore be realised that clinical negligence cases cannot be dealt with in the same way as any other case with a value of less than £25,000.
The government professes a wish to deal with unscrupulous solicitors yet the mean figures suggest that the majority of solicitors do not overcharge. The mean cost for litigated cases equates to £13m, giving a total profit cost for all cases, whether issued or not, of £33m. In addition, ATE premiums amount to £13m. The remainder would be taken up in disbursements (including excessive court fees) medical reports and VAT. The solicitors' fees therefore only amount to 66% of damages. The disbursements, including VAT, exceed the solicitor's costs by a substantial amount.
It must be accepted that the expert's fees are substantial and cannot be limited to £1,200 per expert as suggested in the 2017 consultation. It would be difficult to instruct an experienced expert for this sum. An experienced expert, necessary in clinical negligence cases, can expect a minimum of £1,700 in fees, and even then higher rates would have to be agreed for paediatricians, neurosurgeons and professionals in other highly complex medical specialisms.
The specimen protocol from the 2017 review also suggested claimants should disclose their reports unilaterally, with the letter of claim. This is unacceptable and would put the claimant at a significant disadvantage. Clinical negligence reports on breach and causation, have always been disclosed simultaneously, which protects the claimant from having to disclose their case at an early stage, allowing the Defendant to prepare a report, having knowledge of the claimant’s claim. An early exchange of expert evidence will significantly weaken the claimant’s position and make it more likely that litigation will be necessary. Any protocol introduced to try to simplify the claims process must not be introduced if it reduced the claimant’s chances of redress.
Once a case is allocated to the multi-track it will be subjected to costs budgeting. The majority of cases are allocated to the multi-track. This has been the situation since 2013. This means that all litigated cases settled since that time have had the costs managed and therefore should be indicative of a level of costs approved by the courts. Therefore, fixed costs are unnecessary, as stated in our response to response to Lord Justice Jackson’s Review of Fixed Recoverable Costs in January 2017, and any fixed cost regime should be based on the assessed costs from actual cases, rather than the fanciful wish list of the NHSLA.
In respect of the fixed costs set out in the consultation paper, due to the number of claims in which Thompsons has to decline to act, it is not realistic to accept a reduction in fees for early admission. We believe Thompsons’ position here reflects the state of claimant side law firms generally. Even where the NHSLA makes a concession on breach, it often maintains its arguments on causation and quantum which protract the case unnecessarily. We cannot see any reason why an admission should lead to a reduction in the claimant’s ability to receive costs, save by reducing the work needed to be done and charged for.
If the case settles following issue of a case, where the defendant should have admitted the case under the pre-action protocol, cost penalties should be applied to disincentivise this behaviour.
Our recommendations
If a fixed cost system must be introduced - despite all the good evidence and arguments against it then:
a) The protocol involved must provide a level playing field for both parties and the costs involved must be adequate to allow claimants full access to justice. There should be adequate escape points from the fixed costs regime to allow the claimant to fully investigate the issues involved and a penalty should be applied on the defendant for delays for which they are responsible. Once the figures have been set, there must be a mechanism for regular mandatory uprating by reference to an appropriate index such as RPI.
b) Certain cases should always be excluded from any fixed costs system, including but not limited to clinical negligence, fatal claims, group actions and matters of public importance these are examples of cases that are always far too complicated to have costs limited.
Following on from the points raised above, if fixed costs were to be introduced they would only be suitable for cases which rely on one expert and which can be disposed of in a one day trial. These would be matters which would normally be allocated to the fast-track. Multitrack cases are complex and require a considerable amount of work which cannot correctly be budgeted for in a fixed cost regime. These are, in any case, correctly managed by the court under the existing costs budgeting regime.
If one is to be introduced, implementation of a fixed costs regime should apply only to all adverse incidents which occur after the date of implementation. This would prevent an unnecessary log jam of cases caused as a result of existing claimants seeking to make claims before the date of implementation.
The approach to fixed costs should follow the costs analysis approach, staged and to involve a percentage of the damages. That there should not be a percentage deduction for the defendants if they make an early admission. This does not occur in the fixed matrix for PI cases.
Given that clinical negligence cases can be more complicated even than employers’ liability claims let alone RTA claims, the costs recoverable should be considerably higher than for those cases.
Once a case is allocated to the multi-track, it has, since 2013, been subjected to costs budgeting and the majority of clinical negligence cases are allocated to the multi-track. This means that all litigated cases settled since that time have had the costs managed and therefore those costs should be indicative of an appropriate level of costs that has been approved by the courts and should as actual cases form the basis of any fixed costs regime rather than figures ‘plucked out of the air’ by government or the NHSLA.
In previous consultations regarding fixed costs, it has been suggested there should be a cap on experts' fees. This is unacceptable. The typical cost of a report at present is at least £1,700 plus VAT. A report from a consultant in a more unusual field of medicine can cost between £2,000 and £4,000 plus VAT. Ordinary claimants ought to be able to access expert opinion without fearing a costs penalty based on their solicitors independent expert view of who is most appropriate. It would be a restriction that a wealthy insurer would not be faced with by way of reply.
Claimants should be able to operate on a level playing field in litigation and placing an artificial cap on fees would reduce access to justice for claimants not applicable to defendants who would be able to fund the unrecoverable portion of a report. By contrast the claimant would either have to bear the excess of any non-recoverable amount and/or be limited to using reports from inappropriate or inexperienced experts who would not have the time or ability to provide evidence of equal robustness available to the defendants.
Any simplified protocol for clinical negligence cases would also cause difficulties for the claimant. Claimants cannot, for example, agree to the early, unilateral exchange of evidence. Enforcing this would allow the defendants to prepare their own evidence having full knowledge of the claimant's expert and their viewpoint. This would be at odds with other areas of PI litigation, for example disease cases, where engineering reports to establish breach and causation are still exchanged simultaneously.
A better option would be an early mediation discussion to take place once both parties had obtained their breach and causation reports to take place and before listing questionnaires are filed. This is not compulsory at present and we urge further thought as to whether it should be made so. Thompsons would be pleased to see less adversarial behaviour and would be happy to discuss our views on this issue in more depth with the Department of Health.
Any reduction in trial costs would also mean a reduction in access to justice for claimants. Any case involving two experts for each party would require at least a two day trial and would therefore require allocation to the multi- track. The directions for fixed costs would therefore only be suitable for low value cases allocated to the fast-track. For a multi-track case, highly experienced counsel would be required. As stated on the question of costs allowed for medical reports, restricting costs would affect the claimant more than the defendant. Because of QOCS, the defendant would not expect to recover costs in any event and would be likely to be happy to pay a greater fee for expert counsel. To restrict the limit to an unacceptably low amount would require the claimant to instruct less experienced or less able counsel and thereby put them at a clear disadvantage.
In respect of the number of experts, the rule should be that where the case requires more than one expert on breach and causation, it should not be allocated to a fixed costs regime.
The previous consultations carried out, failed to address the high cost of ATE premiums which are used in 95% of all cases. If the NHS settled more cases by making an admission of liability at an early stage before ATE has been taken out it would reduce premiums significantly. Insistence that it is only firms that specialise in this work who may carry it out would be a better course of action for reducing costs than capping medical fees as premiums for specialists who have membership of the Law Society or AVMA panel are lower.
A proper analysis of profit costs and disbursements including ATE premiums post-LASPO (details of which we would be happy to supply to the committee) would show that costs have already reduced dramatically since 2013. Reputable firms are not over-charging and provide a quality service. This should be enough to satisfy those concerned about rising or excessive costs that costs budgeting has correctly managed the process for multi-track cases and that these cases should not be included within the fixed cost system.
If fixed costs must be introduced, a simplified system would be required to speed up the process for the very simple, low value claims, which could be managed in such a regime. However, this would require a change of attitude within defendant organisations and evidence that there will be a real attempt by them to accept responsibility at an earlier stage than is currently the norm. Defendants also need to comply with time limits and directions of the court, without having to apply for an extension.
Clinical negligence cases are complex and certainly cannot be handled by litigants in person. Litigants in person would not be assisted by pro bono groups who would be unable to develop the high level of technical legal expertise required to be effective. Many claimants in clinical negligence have suffered traumatic incidents or bereavements. The value of the case should not be the overriding factor to assess to justice in any case.
For further information please contact:
Linda Millband
National Practice Lead for Clinical Negligence
Thompsons Solicitors
Congress House
Great Russell Street
London
WC1B 3LW
Oct 2021