The rapid growth and commercialisation of the NHS have led to soaring demand for advice across the spectrum of legal services. Grania Langdon-Down assesses how firms have responded.


The National Health Service, which celebrates its 60th anniversary this summer, is a very different body to the one unveiled on 5 July 1948, when Aneurin Bevan declared: ‘We now have the moral leadership of the world.’



The NHS has grown to become the world’s largest health service, with more than 1.3 million staff and a budget exceeding £100 billion. Over the decades, the one constant has been change – with a stream of initiatives creating new demands, particularly in recent years, such as giving chronically ill patients individual budgets, so that they can control their treatment.



At the same time, the increasing commercialisation of the NHS has seen a growth in the need for legal advice to cover the full range of services, from competition to tax.



Bertie Leigh, a senior partner at national firm Hempsons, which has specialised in health since 1890, says: ‘The old NHS ran, broadly speaking, without the benefit of lawyers. It was run by the medical profession and the management input was tiny.



‘We now have a very different model which is very management intense and needs the full gamut of legal services.’



Historically, healthcare practices were dominated by clinical negligence. That has changed since the advent in the mid-1990s of the NHS Litigation Authority (NHSLA), which is responsible for handling negligence claims made against NHS bodies in England. However, the NHSLA is the biggest client for many of the coterie of firms that dominate the healthcare field.



Hempsons was initially a staff-side firm acting for the Medical Defence Union and the British Medical Association. Leigh says: ‘When clinical negligence was nationalised and staff were given NHS indemnity, we had to follow the work to become a predominantly management-side firm, though we still do high-profile cases.



‘The NHSLA is still our largest client but the core of our work is now acting for the service. Employment is the fastest-growing area. Another development is on the corporate side – we didn’t have a separate NHS corporate department in 1995 but now it is an absorbing interest.’



For London-based Capsticks, healthcare accounts for 95% of its work. Senior partner Peter Edwards says: ‘We got into this work because our founding partner, Brian Capstick, who retired last year, was working in-house for the NHS and realised it would be beneficial all round if the legal services were provided by a private practice.



‘For the first ten years, the work was largely clinical negligence. Now, the NHS requires a full legal service and clinical negligence has dropped from 80% of our work to about 20%,’ he says.



For national firm Bevan Brittan, healthcare accounts for about a third of the firm’s revenue. Stephen Hughes, head of its health division, says the NHSLA still provides its biggest area of work, even though it is a third of the volume they were dealing with just a few years ago.



Other core areas, he says, are employment, followed by property, general healthcare, and general commercial and projects work. He identifies key changes: ‘PFI [private finance initiative] is almost dead now and is being replaced by more commercial joint ventures. We are doing a lot of work helping organisations transfer to foundation trusts, which involves governance issues. In the past, contracts between NHS bodies were not legally enforceable – now they are.’



For Trevor Blythe, head of national firm Beachcroft’s foundation trust unit, competition issues are surfacing as the more entrepreneurial trusts start building market share. ‘Where there is patient choice, there is also competition,’ he says.



As in other niche areas, conflicts can arise because the same names appear on the same panels. ‘We make a point of saying we will never act on clinical cases against the NHS,’ says Hughes, ‘and we would think long and hard before taking on a case for an NHS employee. While it is nice having the luxury of an embarrassment of riches, there are enough conflicts in the health market without developing more.’



It would be ‘astounding’ if conflicts did not arise, says Blythe, but they are ‘relatively rare’.



Blythe adds: ‘We don’t do any staff-side work – that would be silly, because employment is one of our major areas and the prospect of having too many conflicts would just end up annoying people.’



Healthcare accounts for about 15% of Beachcroft’s £120 million turnover. Blythe, who retires in April after specialising in healthcare since he joined the firm in 1974, says: ‘It is a strange market. The big City firms are interested but, overall, the NHS is very price-competitive. The same names appear on all the panels because they are expert at what they do and deliver it at a price, though sometimes it’s a matter of considerable chagrin to find you have charged a client a particular rate, and then discover the other side has used one of the big City firms which has charged twice as much.’



One of the relative newcomers to the field is national firm Wragge & Co. Bleddyn Rees, one of the lead partners in its healthcare practice, says Wragge has developed its expertise in this area over the last five years. ‘We weren’t a traditional healthcare firm. What has happened is that the NHS reforms have led to some legally binding contracts for NHS services and greater use of the private sector. We have a very substantial outsourcing practice, which is skilled in dealing with complicated contracts for services – and we took this team to the health sector.’



Rees spent three years seconded to the Department of Health, which has given him an invaluable insight into the way it operates. ‘It is very important to understand the political dynamics,’ he says.



Healthcare has been one of City firm Kennedy’s main sectors for the last 25 years. Janet Sayers, who heads the healthcare team, says the firm has been involved in two recent cases which have huge significance for the health service. They acted for the NHSLA and two trusts in the Court of Appeal case Thompstone v Tameside and Glossop Acute Services NHS Trust and other appeals [2008] EWCA Civ 5, concerning whether compensation in future care cases should continue to be linked to the retail prices index (RPI) or an earnings-related index.



‘We argued it should remain at RPI but it went against us and it will have a huge affect on compensators of large catastrophic injury claims,’ she says, adding that they plan to appeal to the House of Lords.



They were, however, successful in the Court of Appeal case Crofton v NHSLA [2007] EWCA Civ 71, where the claimant was receiving state funding towards his care. Sayers says: ‘The court said the NHSLA or insurer should be able to take into account any state funding, so the claimant doesn’t make a double recovery. That case has been remitted back to the trial judge to decide on the amount and we will be dealing with that this year.’



Sayers has worked in this field for more than 20 years and finds the human element appealing. When it comes to the skills needed, she says: ‘You have to be good with people. Where an individual is appearing before their regulatory body on a

disciplinary matter, somewhere in the back of your mind you think “there but for the grace of God go I” because you know this concerns their whole livelihood. So you need understanding and empathy and to be a good listener, as well as having excellent technical skills.



‘Claimant solicitors see themselves as fighting on the side of right, but I would like to think we do an equally valid job.’



‘It’s certainly fascinating work,’ says Leigh. Several members of their team have dual qualifications, combining medical, dental or nursing qualifications with their legal qualifications. ‘One is rather proud of being part of a service which is there to help people.’



The work appeals to people who like people, says Blythe. ‘And, goodness knows, it throws up some extraordinary legal problems. You need to keep on learning and have your eye on government policy. But it is not just a question of law, it is about making sure a client is making the right decision for the right reasons and does itself justice in the way it presents them.’



The NHS is rarely out of the news. But paradoxically, says Leigh, the most important health story of 2007 was the collapse of Northern Rock. ‘That was triggered by the collapse of the sub-prime residential market in America. That collapse started around Detroit and was connected with a problem facing the three biggest motor manufacturers – Ford, Chrysler and General Motors. They simply could not afford to meet the healthcare costs of their retired staff.



‘We are moving towards that American model. In the medium to long term, the NHS is heading towards a system which it can’t afford to deliver in an era where the law provides mechanisms for forcing the service to deliver to some people, irrespective of whether it can afford to or not.’



Grania Langdon-Down is a freelance journalist