Costs News

03 March 2016
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QB Master: Costs budgeting is starting to work

Costs budgeting is starting to work in clinical negligence, a Queen’s Bench Master has declared as he expressed his doubts about the expansion of fixed fees.

Master Cook also said claims of more than £50,000 that could not be classified as lower value and before extending fixed costs beyond that figure, “the current costs regime should be reviewed and its effects should be subject to proper scrutiny and research”.

He added: “The inevitable conclusion to be drawn is that there is now a very strong momentum, perhaps an irresistible momentum, towards the introduction of fixed costs in civil claims. But, in my view, change should not be driven on the basis of out of date statistics and the short-term financial interest of the NHS.”

His speech to a seminar at 7 Bedford Row in London came almost exactly a year after another lecture at the chambers in which he had expressed concern about the burden of budgeting in clinical negligence cases.

With a backlog building up, costs budgeting was temporarily disapplied last year for clinical negligence cases and Master Cook said that, following the appointment of one extra full-time master and four deputy masters, it has resumed from this week, with waiting times for first case management hearings “reduced to a few months”.

He continued: “The experience of the clinical negligence masters is that there are now signs that parties are adapting to the costs management process. We are seeing a significant increase in the number of cases where budgets are agreed or where a number of the phases are agreed.

“By requiring the parties to focus on the total budget per phase and requiring cash offers to be made where agreement cannot be reached, the arguments are more focused. This leads to shorter hearings and enables more efficient use of court resources.”

However, there were also “some unwelcome signs”, such as an increase in the number of litigants in person and of non-specialist firms attempting to move into the clinical negligence field, adding to the costs of the process.

Master Cook noted that the Department of Health consultation on clinical negligence fixed costs, which was initially due last autumn, has still not been published even though the planned implementation date of 1 October 2016 remains unaltered.

“It must also be worthy of note that case for fixed fees was presented to the [Civil Procedure] Rule Committee by Mr Masterson of the commercial division of the Department of Health.

“I would suggest that such a state of affairs is profoundly worrying and does nothing to instill confidence in the proposals. What I find particularly concerning is how the NHSLA’s concern over disproportionate costs in ‘lower value claims’, that is claims valued up to £25,000, has morphed into a proposal to fix costs in cases up to £250,000.”

The process of running a clinical negligence cases “has a cost which means that establishing a low-value claim will always proportionally higher than a more substantial claim. I would certainly be slow to describe a claim worth £50,000 to £100,000 a low-value claim”.

This applied also to Lord Justice Jackson’s recent call for the widespread adoption of fixed costs, although he agreed with Sir Rupert that introducing fixed costs for clinical negligence on their own would lead to unhelpful “Balkanisation”.

He concluded: “My own view is that, if this change is to come about, it must apply to all civil litigation; it must be gradual; we must start by extending the low-value part 45 scheme to all claims including the fast-track; there should be gradual extensions of fixed costs from £25,000 to £50,000 to say £150,000 and such extensions should be made in the light of experience; suitable uplifts must be agreed for difficult and complex claims such as clinical negligence, possibly in conjunction with some form accreditation scheme; alternatively, there must be some flexibility in rates (judicially controlled for difficult and complex cases); and there must be a robust and predicable mechanism to update rates paid to lawyers linked to actual costs in the real world…

“In my opinion, a period of calm is called for before more radical change. We do not have a system of justice that is worthy of the name unless people can get effective redress.”

An NHS Litigation Authority spokesman said: “We would agree entirely with Master Cook with respect to his comments on the entry of non-specialists into the clinical negligence market and the difficulties this creates in the resolution of claims.

“It is important that injured patients obtain access to justice at reasonable cost and that excessive costs are challenged appropriately in order to preserve NHS resources for patient care. This is why we have drawn attention to clear evidence of disproportionate costs being claimed, particularly on lower-value cases.”

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