The NHS Litigation Authority has warned it has hundreds of costs appeals in store for claimant firms that tried to change clients’ funding arrangements in the runup to implementation of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act.

The authority last week won a fourth test case against a claimant firm that had switched its clinical negligence client from legal aid funding to a conditional fee arrangement.

The change was made in the weeks leading up to April 2013, when recoverability of success fees and after-the-event insurance premiums were about to be abolished.

The High Court ruled that national firm Irwin Mitchell could not claim around £105,000 in additional liabilities because the client was not made aware of their options – particularly the offer of a 10% uplift on general damages that came as part of the reform package.

The NHSLA said it has now saved £500,000 in additional liabilities claimed in three cases by Irwin Mitchell and one by Slater and Gordon.

An authority spokesman said in many of the cases where changes in funding had taken place, in particular in larger loss claims, it will take some time for damages to settle.

‘It is only when the legal costs are presented at the claim’s conclusion that the total scale of additional liabilities charged becomes clear,’ he added. ‘There are hundreds of claims potentially affected by these four test cases and, where appropriate, the NHSLA will seek to have inappropriate legal costs struck out by the courts in similar claims.’

In Yesil v Doncaster NHS Trust, Irwin Mitchell sought to argue that its failure to give material advice was not relevant to the consideration of whether the decision to switch was reasonable. But the court ruled the client was entitled to have some understanding of their options, even if the firm advising them ‘leaned’ a certain way.

Irwin Mitchell said it acted in the best interests of a specific group of clients by protecting them from changes arising from LASPO and steering them away from an ‘increasingly complex and constrained’ legal aid system.

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