Fixed recoverable costs in clinical negligence – next steps announced

The Department of Health and Social Care has published a response to its consultation on introducing fixed recoverable costs in lower value clinical negligence claims, those worth £25,000 or less. The response sets out the next steps on the path to implementing these, including convening a Civil Justice Council working group on the subject. It is accompanied by a report by Nottingham University Business School Professor Paul Fenn, which includes his proposed fixed recoverable costs figures. Our partner and chair of the clinical negligence sector focus group for the Forum of Insurance Lawyers, Mike McKenna, reviews this development. 

Background

The report responds to a consultation which was open from January to May 2017 and considered issues including:

• how fixed recoverable costs (FRCs) should be implemented
• whether FRCs should be mandatory
• what the rates should be, and how they should be calculated
• how other costs, including expert fees should be dealt with
• how FRC cases should be run

The response document includes a summary of consultation responses received. Opinions were, unsurprisingly, mixed. As to whether FRCs should be introduced on a mandatory basis, there was a split with a majority (58%) suggesting no. The sample was relatively small but highlights the strong feeling amongst claimant representatives.   

As to the date from which FRCs should apply, there was an effective split, some favouring  the date when the letter of claim is sent after any proposed implementation date, and others favouring the date of the  adverse incident after any date of implementation. 

The consultation also dealt with expert witness costs, most being in favour of not capping experts’ fees. Equally the introduction of a single joint expert was answered with a resounding no. Interestingly, in answer to the question of whether there should be an early exchange of evidence, two thirds said yes.

Proposed rates

Professor Fenn’s report has been released with the response. This provides a summary of the more extensive data which he has now considered, together with analysis, and a table recommending an appropriate level for the FRCs. His figures, as set out below, are staged, include an element of damages, and are to apply to clinical negligence claims valued at £25,000, or less. Costs are reduced if there is an early admission:

What next?

A Civil Justice Council (CJC) working party on FRCs has been set up to take matters forward. It will be chaired by a neutral party who will be a member of the CJC, and will be made up of representatives from all sides of the debate, including claimants, defendants, general practitioners and representatives from NHS Resolution. As the new process will apply to incidents of harm occurring in the private sector and to cases brought in Wales, these areas will also need to be represented. Mediation will be used to resolve areas of disagreement.

Preliminary work has already taken place. A chair and deputy have been appointed. Terms of reference will include:

• making recommendations for an improved process for clinical negligence claims worth £25,000 or less
• drawing up a FRC structure, including figures for these, and for expert reports
• having regard to how the new process and FRCs will affect patient safety issues and healthcare provider outcome reporting
• considering how expert reports should be commissioned and funded, including the feasibility of single joint experts

The CJC working party is expected to publish its recommendations by the end of September 2018, with a view to the Government considering these as quickly as possible.

Our assessment

The greatest difficulty will of course be setting the rates in any fixed scheme. Professor Fenn’s figures are based on his analysis of average actual base costs of a clinical negligence claim and therefore attract credibility but he notes their limitations. There will no doubt be discussion from all sides of this debate about how accurately they will reflect the costs of conducting a claim. In addition to satisfying all interests, the timescale of less than six months to meet, decide and issue recommendations by September 2018 is tight. It is however an essential step to limiting excessive costs in low value clinical negligence claims and is likely to be pursued vigorously by Government to translate savings to front line NHS services.