Fixed costs – a fix that doesn’t fix what needs fixing

Posted by Matthew Best, senior underwriting manager at Legal Futures Associate Temple Legal Protection

Best: Lawyers and insurers act as gatekeepers

I understand that there is an argument for reform of clinical negligence claims. However, I believe it is not the system and its associated costs that need to change; the root of the problem is the lack of patient safety learning (learning from mistakes) across the whole of the NHS. It is plain to see that if this improved, the number of clinical negligence cases brought forward will inevitably drop.

Currently, the legal costs for claimants (injured patients) will always be higher than those of the defendant because the claimant has to discharge the burden of proof. However, the figures presented by NHS Resolution (NHSR) are skewed.

This is not least because the comparison does not include the cost of the work carried out by lawyers employed by individual NHS trusts, or the cost of the work carried out by NHSR.

Secondly, the claimants’ costs figure includes VAT, whereas the figure for defendants’ costs does not. In addition, unlike for defendants, the figure for claimant costs includes court fees, which in many cases is a staggering £10,000.

Delay and denial

The cost of clinical negligence claims is actually dropping. Indeed, they have reduced by over £100m from 2019/2020.

As an insurer, we are able to see the reasons why costs increase. Ultimately this is because of certain behaviours by the NHSR – ‘delay, denial, delay’ tactics are currently in operation. This reveals itself in the fact that 81% of claimant cases succeeded (in 2019/2020) where proceedings were issued, a figure that is actually up from the previous years.

I am pleased to see that patient safety minister Maria Caulfield has admitted her mistake on this. She twice advised the health and social care select committee that the current main driver of clinical negligence costs is rising legal costs.

Admitted? Yes. Corrected? No. Ms Caulfield is also wrong to put the emphasis on increasing damages payments as the primary driver. A quick review of the last NHSR annual report shows damages payments actually went down overall as well.

Here at Temple, we are fully on-board with keeping costs down. We actively encourage mediation by building incentives into our insurance cover as standard. This has helped to build constructive case dialogue to keep the duration of cases down, and with that costs – so long as there is engagement from the defendants.

Will fixed recoverable costs solve the problem?

In January, the government published its plans for fixed costs in clinical negligence claims worth up to £25,000.

From a financial perspective, it will push the problem elsewhere – more on that in a minute. But for claimants and their solicitors, I believe that if the fixed recoverable costs proposals are implemented, then many specialist clinical negligence firms will be forced to exit this area of law.

This will reduce access to justice and increase the likelihood of events such as the recent Shrewsbury and Telford Hospital NHS Trust maternity scandal.

What will happen to after-the-event (ATE) insurance premiums?

The consultation is silent on this. These proposals effectively undermine the operation of qualified one-way costs shifting, which was introduced by the government in the Legal Aid, Sentencing Punishment of Offenders Act 2012. Where is the logic in that?

The proposals and the possible costs sanctions require claimants to maintain ATE cover. And there has been no indication that any research has been carried out to ascertain whether ATE providers will have to increase their premiums to reflect possible additional risk.

Correct the source of the problem, not the system

This must be the starting point. Disrupting the system too much will have an adverse effect on already injured claimants. ATE insurance has helped tens of thousands of individuals get access to justice. Conversely, where their case has not been successful, the cover has enabled them to pay back any costs incurred in obtaining medical evidence.

Non-fault systems – a non-starter

Moving on, a rather timely statement on this was from the health and social care select committee, which in April called for the introduction of a no-fault compensation scheme to replace the existing regime.

The costs of implementation will be huge. Comparisons with other no-fault models, such as that in Sweden, fail to take into consideration the considerable difference in spending on social care and benefits.

To introduce such a model in the UK would not only deprive vulnerable patients of full and fair compensation, but then leave them in the hands of a social care and benefits system ill-equipped financially and logistically to look after them. It would only add to the injustice.

Some say no-fault systems would be positive because they take the focus away from the actions of doctors and other medics, reducing stress for all, resulting in less defensive behaviour. But if doctors et al cannot be held accountable for negligence, lessons simply will not be learned and failures will be repeated.

There would inevitably be an increase in the number of claims if the need to prove negligence is removed. Compensation payments would also need to be much lower to make the system affordable.

This means that patients seriously injured as a result of negligence will not receive full compensation – which is needed for people to try and live as normal a life as they possibly can.

Prudent gatekeepers – ATE insurers and specialist clinical negligence law firms

A key role for us is to risk assess claims so that only matters with merit are pursued. Without this, the courts – and the NHSR – will become flooded with matters, many of which will be without merit, causing an unnecessary burden on the legal system.

Without a properly trained lawyer on their side, families and patients will end up having to rely on what the NHS tells them. If specialist lawyers are left out of any new system that is introduced, then from the government’s perspective the whole thing becomes easier and cheaper to manage, but it would come at the expense of access to justice and patient safety.

Baroness Cumberlege’s recent report, First Do No Harm, shows clearly what can happen when people are not listened to. Furthermore, the Morecambe Bay investigation report revealed repeated failures by the trust to improve the care received and address historic issues, leading to an increase in deaths and stillbirths at the hospital.

Where have we got to now?

The question is, will they never learn? Maybe lessons have been learned by the NHS, but the risks patients still face remain unacceptably high and highlights the importance of people being able to access specialist lawyers to act as their voice when things go wrong.

And ATE insurance has helped many thousands of claimants in their journey for justice.

What next?

There remain challenges for each side. As the findings of recent committee reports have been published, claimant lawyer representative bodies have been responsible in their views and actions, but I’d like to hear everyone’s thoughts on these issues.

To facilitate this, Temple is continuing to host events with special guests/speakers in which we can all have our say on developments.

To register your interest or share your thoughts please email me at or call 01483 577877.


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