54 Thursday April 28 2022 | the times
Law
5
The NHS’s rising litigation bill is being blamed on costs incurred by claimant lawyers seeking compensation for injured clientsFixed fee row
for clinical
negligence
Experts are divided over a proposed cost scheme
for lawyers suing the NHS, writes Jonathan Ames
Ministers are on a collision course with
clinical negligence lawyers over a bid to
impose fixed fees for legal costs in “low
value” claims against the NHS.
The brewing row over costs comes as
MPs on the health and social care com-
mittee will say today that the govern-
ment should amend the law so that
those who allege that they have suf-
fered injury at the hands of NHS
medics should no longer have to prove
negligence to be awarded compensa-
tion. It is seen as “a radical overhaul of
the system”, which could significantly
diminish lawyers’ roles.
As the government’s consultation on
the fixed-fee plans closed this week,
lawyers who act for claimants were
quick to warn ministers that they must
exclude “vulnerable” victims of medi-
cal negligence from any streamlined
programme.
The Association of Personal Injury
Lawyers was the first out of the traps,
announcing that it had “grave reserva-
tions” about the proposed scheme.
“Subjecting vulnerable injured
patients, who lack the capacity to bring
their own claims, to this pared-down
process is unfair and inconsistent,” says
Suzanne Trask, who sits on the associa-
tion’s executive committee.
Trask pointed out that “protected
parties” — such as those who have
learning difficulties or other cognitive
needs — are excluded from other
low-value schemes, such as for road
traffic collisions and workplace inju-
ries. She argues that those exemptions
existed “because of the complexity of
their cases. Additional work is required
to help people without the capacity to
manage their own claims and it is
extremely difficult to anticipate the
amount of extra time and work
required.”
Trask adds that cases where patients
have died at the hands of the NHS “cer-
tainly need more time and greater sen-
sitivity than is afforded by this scheme”.
Josh Hughes, a partner at the firm
Bolt Burdon Kemp, says that claimant
lawyers are “incredibly frustrated by
the government’s relentless pursuit of
injured people and those representing
them as the sole cause behind the
NHS’s rising litigation bill”.
He goes on to brand that approach as
“lazy and objectively flawed” and re-
cites a view frequently heard from
claimant lawyers that their counter-
parts acting for the health service are
trapped in a “culture of defending the
indefensible”.
In other words, NHS senior manag-
ers and their lawyers will appear to be
prepared to die in a ditch defending
litigation that they ultimately lose,
racking up significant legal costs for the
taxpayer along the way.
Still, ministers have powerful allies in
defendant lawyers who act for equally
muscular insurance companies.
Senior figures at the Forum of Insur-
ance Lawyers (Foil) highlight figures
that show that the cost of clinical
negligence claims against the NHS —
whatever the cause — has risen four-
fold over the past 15 years to £2.2 billion
in 2020-21.while maintaining access to justice for
injured patients”.
The proposals from the Department
of Health and Social Care were devel-
oped by the Civil Justice Council
through a working group that included
defendant and claimant lawyers.
Key to the proposed reforms are tight
timescales that would require the NHS
to deal with claims promptly or face
financial penalties — a move that
proponents argue would be likely to re-
duce the time taken to resolve disputes
by 30 per cent.
But detractors maintain that the
fixed costs element of the plan will
deter the most experienced and best
qualified lawyers from bringing lower
value claims.
“Fixed recoverable costs will present
a significant barrier to access to justice
as many specialist firms will not be
prepared to take on the work and in-
vestment involved in pursuing these
often complex cases if there is not a
sufficient return,” says Qamar Anwar,
the managing director of First4lawyers,
a claims handling business.
Anwar adds that “low value does not
mean simple — the consumer will
therefore have less choice”.
Chris Bones, the chairman of the
Chartered Institute of Legal Execu-
tives, whose members deal with many
lower value clinical negligence claims,says that while “faster resolution for
claimants is something we all wish to
see... this cannot come at the expense
of the ability to make that claim in the
first place”.
He says the government’s plans risk
“drastically shrinking the pool of
lawyers available to take on such work,
limiting the ability of victims to seek
redress and removing the opportunity
for the NHS to learn valuable care
lessons”.
Defendant lawyers argue that the
success threshold for all clinical negli-
gence claims is high regardless of value.
“Claims do not succeed unless either
the defendant accepts, or the court de-
termines, that the standard of medical
treatment provided has been so poor as
to constitute negligence — and that it
has gone on to cause avoidable harm,”
says Hughes, adding that “this funda-
mental point is so often ignored by gov-
ernment as demonstrated by this latest
consultation. Rather than recognising
the fact of, and tackling the root cause
behind, rising negligence cases, it is far
easier and quicker to deliver savings by
restricting access to justice to vulnera-
ble patients.”
A government spokeswoman con-
firmed that ministers had 12 weeks
to chew over the responses to the
consultation before announcing their
next move.It is argued that legal costs form a
significant proportion of that rise and
that the amounts claimed by claimant
lawyers are much higher than those
paid to defendant legal teams.
Moreover, Foil calculates that costs
incurred by claimant lawyers in bring-
ing lower value cases are “particularly
disproportionate” — on average four
times those claimed by defendants and
twice the amount paid in damages to
injured claimants.
“These costs come out of the NHS
budget and would otherwise be spent
on frontline healthcare services,” says
Shirley Denyer, a solicitor and Foil’s
technical consultant.
Denyer praises the government’sproposed reforms as aiming “to
simplify and streamline the process”,
which will mean it will be “cheaper
and will deliver compensation more
quickly, avoiding the need for court
proceedings”.
Foil estimates that the reforms could
save £454 million over the first ten
years, which Denyer describes as “a
significant saving to the NHS budget,‘Fixed recoverable costs
will present a barrier to
access to justice’
CHRISTOPHER FURLONG/GETTY IMAGESTimes Law
Editor Jonathan Ames
020 7782 5405 [email protected]
Advertising and marketing
For print and online: Jeanine Kiala
020 7782 7518 [email protected]Law firm partner pay packets rocketed
by nearly 40 per cent in 2020 as re-
search reveals that the legal profession
survived coronavirus with significantly
increased profits.
However, there is evidence that
lawyers’ success during the pandemic
came on the back of taxpayer-funded
help. The latest in a stream of studies
showing that the legal profession
broadly weathered the pandemic well
comes from the Law Society, the
professional body for solicitors in
England and Wales.
Its figures published last week show
that on average, equity partner pay rose
by 39 per cent through increased fee
income — but also through furlough
grants from the government.
Reduced staff and other office over-
heads during the pandemic also boost-
ed overall profits and partnership pay.
Law firms in rude financial health thanks to handouts
The research shows that about 70 per
cent of law firms in the jurisdiction
reported revenue growth with fee
income per equity partner rising on
average by 8.3 per cent from about
£762,000 to more than £825,000
between 2020 and last year.
Some firms will not thank the
society’s leaders for publishing such an
unvarnished report of how legal prac-
tices availed themselves of government
largesse during the pandemic — only to
come through the other end so finan-
cially healthy.
The researchers report that 83 per
cent of responding law firms say they
furloughed at least some of their staff at
some point during 2020 and 2021, with
the proportion of support staff paid
through that scheme being higher than
the proportion of fee earners.
Nearly 75 per cent of firms borrowed
cash from the taxpayer, either through
Whitehall’s bounceback loan scheme— the effectiveness of which has raised
serious questions — or the coronavirus
business interruption loan scheme.
In addition, 13 per cent of solicitors’
firms took up the offer of local author-
ity grants during the pandemic, receiv-
ing on average £27,000 each.
There also appear to have been tax-
breaks aplenty for the solicitors’ profes-
sion. Nearly 80 per cent of firms
deferred the payment of VAT liability
and about 45 per cent of self-employed
sole practitioners or partners at either
traditional partnerships or limited lia-
bility practices deferred tax payments.
The report is blunt, saying that “over-
all, many of the firms taking part in this
year’s survey saw stronger than expect-
ed levels of performance for 2021”.
It goes on to say that “the challenge
for many firms will be in maintaining
the increased levels of profitability
over the coming months and years” —
not least, some cynics might argue,now that the Whitehall bail-out tap
has been turned off.
John O’Connell, the chief executive
of the lobbying group, the TaxPayers’
Alliance, acknowledges that “taxpayer-
funded support was necessary during
the Covid crisis, but should not have
been taken lightly. Some businesses
have repaid the support offered to them
by taxpayers. They should serve as an
example for other firms that have come
through in rude health.”
Unveiling the latest report, Paul Ben-
nett, chairman of the Law Society’s law
management section, says that “some
law firms did exceptionally well”, before
tempering his enthusiasm by adding
that “others struggled — to some extent
this was likely dependent on which sec-
tor or client group they supported”.
For Bennett, the key to survival for
those firms that did boost their profits
was all about management technique
and not Whitehall handouts. “Thosefirms with good habits around client
service, good practice that engendered
trust at a critical moment in history and
the ability to offer the right expertise for
the moment did well,” he says.
A Law Society spokeswoman points
out that in common with other busi-
nesses “law firms faced unprecedented
challenges during the pandemic and
had to adapt incredibly fast to continue
to serve their clients. Government
support helped them, as it helped so
many other businesses, to adapt to
rapidly and repeatedly changing cir-
cumstances to keep the wheels of
justice and commerce turning”.Jonathan Ames