Costs News

18 July 2019
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NHS Resolution hails success in reducing claimants’ costs budgets

NHS Resolution has hailed its success in reducing claimants’ costs budgets as new figures show that the amount it is paying out to opposing lawyers has fallen for a second year running.

Its annual report, published last week, said damages payments to claimants went up 14% to £1.4bn in the year, with a further £385m attributable to the higher discount rate.

NHS Resolution paid out £442m in claimant legal costs, down from £467m – “as the LASPO reforms take effect” – following last year’s £32m fall.

The report said claimant costs in cases worth between £25,000 and £100,000 averaged £53,000 in 2018/19 (down from £60,000 the previous year). The average costs for cases worth up to £25,000 was £21,000.

But its own spending on defence legal costs went up 8% to £140m “as we have focused our activity on early investigation and took action to deal with the change to the [discount rate]”.

NHS Resolution said its two costs panel firms, Acumension and Keoghs, have advised “in many individual cases where costs budgets have been reduced by hundreds of thousands of pounds” – for the claims managed by Acumension, judges reduced claimants’ budgets by over £62m in total (based on cases proceeding the whole way to trial).

The report said NHS Resolution was facing up to “uncertainty” in the legal environment – such as how to apply both the proportionality test and the ‘good reason to depart’ test – by “capturing data and market intelligence to better inform decision-making on legal spend management matters at both a strategic and tactical level, while supporting proposals for fixed costs to be introduced in lower value clinical negligence claims”.

The successful appeal on ‘good reason’ in Barts Health NHS Trust v Salmon “provides the opportunity to have many phases of the bill properly assessed by a costs judge at the end of the case”, it added.

The report said NHS Resolution “continues to make very substantial savings in ‘change of funding claims’” following the Court of Appeal’s decision in Surrey v Barnet and Chase Farm Hospitals NHS Trust and other appeals.

It also highlighted the striking-off of Andrew Good, joint owner of Hull law firm Rapid Response, after the High Court concluded that he showed a “serious lack of integrity” for overcharging the NHS. “We first reported our concerns to the Solicitors Regulation Authority in 2013, after which an investigation was launched.”

The report said there has been a “noticeable culture shift” towards mediation; the number of mediations more than doubled from 173 to 397, compared to 62 trials. Three-quarters of cases settled within 28 days of the mediation. Costs Alternative Dispute Resolution (CADR) is the appointed mediator for disputes arising from the recoverability of legal costs, but the report did not specify how many cases it handled.

Overall, the number of new claims received in the year to 31 March 2019, 10,678, was almost exactly the same as the previous 12 months despite rising activity in the NHS. The number of non-clinical claims increased very slightly to 3,585.

NHS Resolution chair Ian Dilks said the Civil Justice Council should receive a report on fixed recoverable costs for clinical negligence claims this summer, which should lead to a consultation by the Department of Health and Social Care.

“As the National Audit Office study published in September 2017 concluded, in order to tackle the drivers of cost, any strategy will need to include legal reform. However, any changes are now unlikely to take effect before 2020.”

 

Comments

Dragon 2   18/07/2019 at 12:13

Humph - in actual figures, there is no difference, just obstruction regarding legal costs for claimants. The 8% increase in NHSR battling legal costs equates to just over £10m. The reduction reportedly seen regarding Claimants' recovered costs is £25m. However, when the deferred payments of the withheld ARAG premiums are factored in, together with the interest thereon - either at 8 or 10.5% it seems the books will balance or possible tip in favour of the Claimants!!

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