27 April 2022

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Fixed costs will not work in clinical negligence cases, warns ACL

Fixed recoverable costs (FRC) are not fit for purpose when it comes to low-value clinical negligence claims but introducing a streamlined pre-action ‘track’ to deal with them will reduce costs anyway, the ACL has argued.

Responding to a Department of Health and Social Care consultation, the ACL said the proposed new process – which aims to speed up how these claims are handled – should be introduced on its own without FRC “to enable a full and proper analysis to take place as to efficacy of this proposal and to also consider the potential costs savings”.

It said: “The ACL believes that this will achieve the intended objectives as set out in the consultation whilst avoiding the implementation of a FRC scheme. The ACL considers that a FRC scheme is wholly inadequate when applied to clinical negligence claims due to the significant negative impact it will have on the access and administration of justice and certainly with claims involving vulnerable and protected parties.”

A survey of members found most believed costs would fall through implementing a new process: “There are concerns that FRC are never suitable for clinical negligence matters given how different each claim can be and the unique investigations that need to be conducted. An overwhelming majority of respondents considered that the FRC proposed are not fit for purpose.”

Should the government decide to go ahead anyway, the ACL questioned the level of costs, noting that the consultation failed to provide “any form of reasoning” behind the decision to opt for the FRC recommended by defendant, rather than claimant, representatives.

The ACL urged a “full and proper costs analysis” before the final FRC are decided. All Costs Lawyers surveyed said the proposed costs were such that they would restrict from the full investigation of claims, undermining access to justice.

Similarly, most members considered the small ‘bolt-on’ fee for cases involving protected parties/children to be inadequate, given the additional procedural steps that are required for the court to approve any settlement, as well as the additional care and expertise needed when advising vulnerable claimants.

Members were concerned more generally that insufficient fixed costs would lead to greater deductions from damages by lawyers to make claims economical to run. “This impacts the access and administration of justice due to claimants ultimately not receiving a sufficient level of damages.”

The majority of Costs Lawyers said FRC would impact their workloads; over a quarter of respondents said more than half of their clinical negligence work would be affected by the proposals.

The ACL expressed concern that the proposed twin-track approach – with a standard and lighter track, the latter for claims where liability is admitted – would create “unnecessary complexity” and be “a fertile breeding ground for further disputes and satellite litigation”.

It explained: “The proposals include two separate sets of FRCS which are triggered at different stages along each track. There is seemingly a lack of consideration to the potential for matters to change tracks and the effect that such a change would impact on costs.

“It is therefore considered that the adoption of the standard track on its own would be the most appropriate given that some form of expert evidence on liability will likely obtained in the preliminary investigations into the issue of liability and causation.”

In any event, the response added, an early admission of liability would enable the claim to progress quickly and more efficiently anyway whilst giving sufficient time to investigate the claimant’s condition and prognosis.

“It is a concern that the light track could promote under-settlements, and therefore affect the claimant’s access to justice by placing deadlines on negotiations and ADR which may occur prior to the end of the claimant’s prognosis period.”

Kris Kilsby, the ACL Council member who headed up the working party that drafted the response, said: “Though we recognise that the government wants to reduce what the NHS spends on clinical negligence claims, this debate boils down to what is right for the injured person. These claims may be relatively low value, but they are not low impact and negligence victims need to be able to seek justice.

“Fixed recoverable costs are a very blunt instrument that may work in areas where the course of claims is relatively predictable – such as road traffic accidents – but not in a much more complex area like clinical negligence.

“Our members are experienced and knowledgeable about costs and are able to greatly assist the court to ensure that costs in such cases are kept to reasonable and proportionate amounts. Introducing FRC will remove this level of check and balance and could lead to unjust results in respect of costs recovery which could ultimately lead to an impact on access to justice.”