Serious concerns exist regarding the level of costs in clinical negligence actions. A number of factors have contributed to this including the recovery of success fees (commonly claimed at 100%); the amount of ATE insurance premium allowed on assessment and the level of costs incurred pre-proceedings. Lord Jackson has examined these issues at length.
Lord Jackson’s View
Only a minority of meritorious claims are settled before costly proceedings are issued and it was concluded that there are seven reasons for excessive costs being incurred in cases which ought to (but do not) settle early. These factors include no effective control on claimant costs pre-proceedings; NHS Trusts and similar bodies failing to notify the NHSLA of letters of claim; limited time allowed for defendants to investigate claims leading to unnecessary proceedings being issued; the NHSLA seldom obtaining independent expert evidence upon receipt of a letter of claim; in some cases defence teams failing to get to grips with cases until it is too late; claimant and defendant representatives sometimes failing to comply with the letter or spirit of the pre-action protocol and on some occasions the defendant is willing to settle without admitting liability but the protocol makes no provision for this.
In respect of issued proceedings Lord Jackson believed there should be a harmonisation of case management directions across all court centres with cases assigned to the same Judge or pair of Judges throughout its existence.
There should also be greater emphasis on case and costs management before and after proceedings are issued.
The proposed NHS Redress Scheme is considered a sensible and economic approach to resolving lower value claims and the regulations should be drawn up so the scheme can be implemented.
In addition to the above, Lord Jackson expressed the general view that success fees and ATE insurance premiums should not be recovered from losing opponents in civil litigation.
The review sets out a number of recommendations that will affect the cost in clinical negligence actions.
It is proposed that success fees and ATE insurance premiums should not be recoverable in civil litigation and qualified one way fee shifting should be introduced. To compensate Claimants for the removal of success fee and ATE insurance premium recovery it is proposed that general damages should be increased by 10%.
In addition to the above there are other recommendations directed specifically at clinical negligence actions. These include penalties for failing to provide copies of medical records during the protocol; extending the time to respond to a letter of claim to 4 months; other than in frivolous claims the NHSLA should obtain independent expert evidence before the letter of response; defence organisations should nominate an officer to deal with complaints regarding defence lawyers failing to deal with issues; the protocol should provide a limited period for the defendant to offer to settle the claim without admitting liability; case management directions should be harmonised across England & Wales and regulations should be drawn up to implement the NHS redress scheme. Pre and post issue costs management procedures should be piloted with a threshold limit of £30,000.00 before proceedings are issued, with £15,000.00 of that limit being for costs before the letter of claim. Claimants should also complete costs budget questionnaires and budgets should be set by the court in issued cases.
Lord Jackson’s recommendations are far reaching and if implemented will result in a major overhaul of costs management and recovery. Details of the proposed costs budgeting pilot scheme have not yet been finalised and whether defendants will be allowed to make representations when the budget is set will be an important point.