Costs News

23 July 2015
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News in brief 23rd July 2015

NHSLA complains about costs bills
The NHS Litigation Authority (NHSLA) has complained of “an increasing number of plainly excessive and disproportionate costs bills” from claimant lawyers, and highlighted the need for costs to be more proportionate to damages in claims of a lower value.

The Department of Health and Ministry of Justice are currently working on proposals to cap legal costs in claims worth less than £100,000 and the NHSLA annual report, published on Friday, said that for cases worth up to £100,000, claimants’ legal costs represented 52% of the claim value, up from 32% in 2004/5. There was no comparative figure for defendant costs.

For claims of less than £10,000, claimant lawyers recovered an average of £28,436 in costs, a figure that has increased steadily from £11,281 a decade before. Defendant lawyers were paid around half the sum in issue on average.

In all, 66% of clinical negligence expenditure went on damages, 25% on claimant costs and 9% on defendant costs. Claimants in all claims resolved in 2014/15 collectively sought £326m in legal costs, but either settled for, or were ordered by the court to accept, £219m – meaning the NHS reduced bills by a third on average.

The report said: “We continue to receive claims for costs which significantly outweigh the value of the settled claim for damages. We have been concerned by the accuracy of some of the bills we have received and this has required us in some cases to refuse to make any offers in settlement to ensure that the bill is either withdrawn or the claim for costs assessed by the court.”

The NHSLA received 11,497 new clinical claims in the year to 31 March 2015, a small dip on the year before, which it attributed to the cases signed up during the pre-Jackson rush two years ago finally tailing off. Some 46% of claims concluded in 2014/15 were resolved with no damages payment, while the NHSLA successfully defended 64% of cases that reached trial.

The NHSLA also deals with non-clinical claims made against the health service and the report said “the success of fixed costs in reducing excessive and disproportionate legal bills for employers’ and public liability claims should not be overlooked”.

Jonathan Wheeler, president of the Association of Personal Injury Lawyers, said: “Savings could be made if the NHSLA were to admit liability where is it obviously due, rather than defend until the door of the court and then settle at the last minute, having run up huge costs on both sides along the way. The NHS would help the NHSLA in its commitment to defend public funds if it was to steer its focus onto preventing harm in the first place and righting wrongs when they happen.

“The NHSLA is a ferocious defender and is clearly proud that 64% of claims are successfully defended in court. But just because the NHS did not have to pay any compensation does not mean that the claimants did not have valid cases, or that they are deceitful for pursuing claims. A case for medical negligence can be very close between who succeeds and the outcome could turn on the presence (or not) of the tiniest piece of evidence. The fact that a case got as far as going to court means that a judge was needed to make the decision. While the NHSLA should rightly protect the public purse, it is unfair to suggest that unsuccessful claims were ever ‘unmeritorious’.”

MPs probe court fee rises
The justice select committee has announced an inquiry into effect of the new fees and charges levied on people bringing cases in both courts and tribunals.

The committee said it was particularly interested in submissions that addressed the impact on access to justice, and the volume and quality of cases brought; how the court fees regime “affected the competitiveness of the legal services market in England and Wales, particularly in an international context”; and the effects on defendants of the introduction of the criminal courts charge.

The deadline for written submissions is 30 September. Click here for more details.

Meanwhile, giving evidence before the committee last week, Lord Chancellor Michael Gove said there would be reviews of the overall impact of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, as well as this year’s court fee rises, and that he would act if they needed to be revisited.

On court fees, he indicated he would be looking for examples of ‘rough justice’ – and equally would consider raising fees further if the Ministry of Justice judged the market could bear them.

Asked specifically about employment tribunal fees, he added that there was no evidence yet that people with meritorious claims were not getting access to justice – saying a fall in the number of claims did not indicate in itself that there was a problem – or that employers were behaving worse as a result.

As this eBulletin was finalised, the Ministry of Justice announced plans for a new round of court fee rises. We will report them in full next week.

CLSB’s deregulatory role
The Cost Lawyer Standards Board’s work in developing outcomes-focused standards from scratch, and in publishing accessible data about those it regulates, have been highlighted as examples of the work done by legal regulators in helping to deregulate and liberalise legal services since the Legal Services Act was passed in 2007.

The achievements were included in a report submitted to the Ministry of Justice on behalf of all the regulators by the Legal Services Board (LSB). It was part of the first output from joint work in the wake of a commitment the regulators made to the government last year to identify opportunities for deregulation.

The LSB also sent the government a list of “minor” amendments the regulators would like to see to the Act, focused on making it easier to approve and regulate alternative business structures, along with a briefing paper on alternatives to client account.

However, discussions on what options there may be for more fundamental reform if there was the opportunity of a new legislative framework for legal services – which are being facilitated for the LSB by Professor Stephen Mayson – are ongoing and not reported on to Mr Vara. But last week Lord Chancellor Michael Gove confirmed that there would be a review of the Act during this Parliament.

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