Paul Rogerson looks at the recurring controversy surrounding costs in clinical negligence claims


The annual NHS legal bill runs into hundreds of millions of pounds. However, the Department of Health will not disclose precise figures or comment on how much of the annual NHS budget is split between in-house lawyers and external legal advice.



This is hardly surprising, perhaps, given political sensitivities – particularly in respect of sums paid to law firms and other advisers working on private finance initiative deals.



A DoH spokeswoman said: ‘A central theme of our reform programme has been to devolve the running of the NHS to local people. This includes allocating 80% of the budget to local managers and clinicians (so that they can spend NHS funds on local priorities), cutting centrally set targets, and giving the local NHS more flexibility and freedom to design and run services to suit the needs of their local areas. This includes spending on clinical priorities as well as running costs such as legal advice.’



What is on record is the NHS Litigation Authority’s disquiet over the rising bill for legal costs in clinical negligence claims. These totalled £133m for claims closed in 2006/07, according to the authority’s last annual report.



Costs incurred by claimant lawyers (£83m) were significantly higher than that those incurred by the authority’s own panel solicitors. Claimant costs as a percentage of damages amounted to 25.74% compared with 15.3% for defence costs.



‘We remain greatly concerned by the continuing increase in claimant costs,’ NHSLA chief executive Stephen Walker told the Gazette. ‘The only control measure is assessment – what used to be called taxation – and the courts allow very generous claims for costs and huge mark-ups on conditional fee agreements.’



This seeming anomaly continues to generate its share of lurid headlines. ‘Legal “vultures” are making £2m out of the NHS each week,’ shrieked one Sunday newspaper just last week.



Amanda Stevens of City firm Charles Russell, who is vice-president of the Association of Personal Injury Lawyers, is well-placed to comment as she is herself a former hospital manager. ‘It’s important to put these figures into context,’ she says. ‘Of around 850,000 adverse incidents giving rise to injury in the NHS each year, only 1% give rise to a claim and the latest figures show that of those under 10% were successful. Also, it is insulting to imply that rectifying the harm caused to people who have been carelessly or recklessly injured is somehow wrong.’



Stevens also stresses that solicitors taking on ‘no win, no fee’ cases are entitled to be compensated through an uplift in cases they win for the financial risk they are taking.



‘This is very long-tail business too; cases commonly take years to settle and we only get an uplift if the court sanctions it. We have no absolute right to it,’ she adds.



On the imbalance between claimant and defence costs, Stevens says more junior staff are used on defence and that is reflected in the figures.



‘It’s also more difficult to put a case forward than to knock it down,’ she adds. ‘Our common experience too is that very strong claims are dragged out through a tactic of constant stonewalling, and that in itself inevitably adds further cost.’