NHS PS500 Million to be saved by new cap on legal costs

The government has launched a consultation to address the disproportionately high legal fees associated with lower-value clinical negligence claims.

NHS PS500 Million to be saved by new cap on legal costs
  • The government proposes a new cap to ensure that lower-value clinical negligence cases are treated fairly and proportionately.

  • To speed up resolutions, patients will be prioritized with a simplified process.

  • Proposals could save half a million pounds for the NHS over the next ten year

The government launched a consultation in an effort to preserve funding for the NHS by taking on increasing and disproportional legal fees for lower-value clinical negligence claims.

These proposals would increase legal costs in proportion to the amount of compensation awarded for lower-value claims. These typically have a value between PS1,001 to PS25,000.

These plans will only impact the legal costs of people who file claims and the lawyers they can recover after a successful claim. They do not affect the amount of compensation patients would receive.

The cost of medical negligence claims has increased significantly in recent years. The National Audit Office (NAO), however, has identified legal fees as a major factor.

These claimant legal expenses are on average four times more expensive than the defendant legal costs for lower-value claims.

This is due to the fact that lawyers can claim unlimited legal costs. This means that these legal costs average twice the compensation patients receive for claims of lower value. One case involved lawyers claiming PS72,000 for legal costs in a case where the patient was awarded PS3,000.

As the NHS continues to deal with the backlogs created by the pandemic, this funding is vital. These proposals could help save almost half a million pounds over the next ten year.

While overall costs for clinical negligence have increased sharply, the National Audit Office has confirmed that this is not due to any decrease in patient safety. This has been and continues to be a top priority of both Government and NHS.

Maria Caulfield, Minister for Patient Safety, stated:

I am committed to making the NHS one of the most secure healthcare systems in the world. It's important that the NHS learns from any harm. Those who have been negligently hurt can claim compensation.
We are witnessing some law firms making a profit at the NHS' expense by charging legal fees that are far greater than the actual compensation paid to patients. As staff struggle to address the COVID-19 backlogs, this takes resources away from the NHS frontline.
Our proposals will limit legal costs for lower-value claims to ensure that they are fair, proportionate, and that patients' claims are settled as quickly as possible without reducing their entitlement to compensation.

The government is also working with consultants to develop a new, simplified process that will speed up claims processing and reduce the need to go to court. To encourage cooperation and minimize delay, cost, and distress, this process will assign claims to two tracks based on their complexity. It also includes two resolution stages in the process, including a stocktake meeting with parties and a neutral assessment by a barrister.

These proposals are in line with Sir Rupert Jackson's (then Lord Justice Jackson) 2017 recommendation to the Civil Justice Council that a streamlined, bespoke system of fixed recoverable cost be developed. Their report was published on October 2019.

Today's consultation closely follows the CJC's recommendations. It also takes into consideration the responses to DHSC 2017 consultation.

The cost of clinical negligence has increased from PS582million in 2006/7 to PS2.2billion in 2020/21. This is a significant burden for the NHS. Since 2006/7, the legal costs for all claims have increased fourfold to PS433 millions.

These unsustainable costs have been addressed by the government and the NHS is closely working together on solutions.

The government and NHS are also continuing to do world-class work to improve patient safety.

  • In July 2019, the first National Patient Safety Strategy for the NHS (NPS) was published. It was updated in February 2021 to reflect the lessons learned from the COVID-19 pandemic and to help reduce inequalities in patient safety.

  • The government will invest PS9.4million to pilot interventions aimed towards reducing brain injuries at birth. These claims account for approximately half of the cost of clinical negligence. However, the announcement today would not affect these claims.

  • To recruit 1,200 midwives, and 100 consultant obstetricians, the NHS will invest PS95 million more in maternity services. This fund will help with training and development, culture and leadership enhancements, as well as strengthening assurance and monitoring of maternity safety issues to ensure that problems are identified and addressed earlier.


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