Can new clin neg fee scheme be made to work?

Lawyers who deal with lower-value clinical negligence claims have been braced for an attack on their fees for at least the past five years. Last month, the government finally launched its assault.  

The Department of Health (DoH) announced it was pressing ahead with fixed recoverable costs (FRCs) for clinical negligence cases worth up to £25,000, and the consultation on its plans will close on 24 April. The good news was that it recognised the need for a streamlined process to go hand in hand with fixed costs; and it has largely proposed adopting the carefully crafted procedure drawn up by the Civil Justice Council in October 2019. Unfortunately, this is greatly overshadowed by the bad news – that the level of fixed fees put forward means many people injured through negligent care would struggle to find a solicitor to act for them.

The government’s position on fees was a shock, not least because it was clearly not what had been envisaged by the CJC. Its working group, with lawyers from each side of the fence, sat across the table and tried to thrash out a set of agreed figures. But with so much at stake, claimant and defendant lawyers were unable to find that sweet spot between the two positions that clinical negligence lawyers normally do reach day in, day out when agreeing settlements for individual clients. With no consensus, the CJC published a table showing the desired fees of the two sides, but it clearly envisaged that the ultimate solution would lie somewhere between the two. Indeed, the CJC even set out a detailed methodology suggesting how a compromise could be reached.

So, did the government adopt this nuanced approach? Far from it. Instead, it has simply put forward the fees proposed by the defendant side. This was a nasty surprise to the clinical negligence market. But given that the DoH foots the bill for clinical negligence costs, perhaps it was grimly inevitable. Indeed, the department estimates that the new FRC scheme will save £454m over the first 10 years.

The target of these reforms is claimant legal costs, not clients’ damages. But it is worth recognising that if the fees are too low, then either lawyers will not run the claim at all – effectively reducing damages to zero, because the claim will never be made – or solicitors will have to charge their client an extra sum, which will come out of their compensation. So there is clear potential for these reforms to have a knock-on effect on damages.

Should claimant lawyers despair if the proposed regime is adopted, the future of this work will hang on how well the streamlined procedure works and whether its efficiency savings will be enough to make up for the very low fees. The process is certainly geared towards addressing what claimant lawyers have always highlighted as the number one factor in pushing up costs: defendants’ reluctance to admit liability until faced with a looming trial date. In a bid to eliminate this problem, the new process involves strict timescales for setting out positions, rapid exchange of evidence, and contains various incentives to encourage defendant lawyers to admit liability early on. For example, claims where liability is not in issue can largely head straight to the ‘light’ track – where the FRCs are even lower – rather than the ‘standard’ track.

The most radical aspect of the new regime is ‘mandatory neutral evaluation’ by a barrister, which acts as a last-ditch attempt to resolve claims that have not yet settled, before they can start the court process. Under the new system, an experienced barrister will assess liability, quantum or both, purely on the papers (with a limited ability to probe further, and only in certain circumstances). Parties are free to reject the barrister’s opinion and proceed to litigation but this carries an extra costs risk.

The barrister will be selected at random from a pre-agreed panel of experienced counsel, with each party given one veto card. To encourage barristers to sign up, the government has been decidedly more generous to the bar than to claimant solicitors, with a barrister’s on-paper evaluation of liability and quantum attracting a tidy £2,000.

So is this new barrister assessment a pragmatic and sensible solution, or simply dumbed-down justice on the cheap? I suppose it is a bit of both. If it manages to keep parties away from the courts, the government will deem it a success, regardless of the level of settlement. But if it does not, it will simply have added an unnecessary layer of cost and be called a failure.

Let’s hope that, for the benefit of those unfortunate patients who have been injured through careless or substandard medical care, the new system can be made to work fairly, despite the low fees on offer.

Rachel Rothwell is editor of Gazette sister magazine Litigation Funding, the essential guide to finance and costs.

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