Response of the Law Society of England and Wales to the Department of Health consultation on in

Transcription

1 Response of the Law Society of England and Wales to the Department of Health consultation on introducing fixed recoverable costs in lower value clinical negligence claims April 2017 The Law Society 2017 Page 1 of 12

2 EXECUTIVE SUMMARY Introduction 1 We support the Department of Health's objective to improve patient care whilst reducing the cost of clinical negligence litigation; however, we do not believe that introducing the proposed form of fixed recoverable costs (FRCs) is the best way to achieve this goal. We suggest that the Department revisit the details of the scheme with stakeholders after the consultation has closed. 2 The Society does not oppose FRCs in principle, provided that: FRCs are applied in genuinely low value and non-complex claims; Rates are fixed reasonably for the work required; Appropriate exemptions are put in place; There is strong empirical evidence to justify the approach to setting rates; Court rules and procedures are aligned with their introduction; Appropriate IT systems are developed for courts to effectively deliver such a scheme. 3 The Society responded to the Department's pre-consultation in August 2015, and recommended that a FRC scheme might be appropriate for damages up to 25,000 if liability is admitted. 1 We are, therefore, pleased that the proposal has been amended to consider fixed costs up to 25,000 rather than 250, However, the Department's proposal extends to cases in which liability has been denied. Moreover, the majority of clinical negligence cases of all values are allocated to the multi-track because of their complexity. This is the first time that there has been a proposition to include multi-track cases within FRCs, so the details within the scheme must be looked at carefully. 5 If the Department decides to introduce a FRC scheme, it must ensure that: Victims of clinical negligence are able to get justice for their injuries; Clinical negligence solicitors can viably do low value cases to the highest professional standard; Experts are incentivised to work on these cases and can produce meaningful evidence within any capped fee. 6 A FRC scheme could work in simple low-value cases if there is an accompanying fixed process. We believe that it will be key to set clear expectations for parties' conduct, and develop a streamlined regime that ensures equality for both sides. If this does not happen, there is a significant economic incentive for the 1 The Law Society response to the Department of Health's pre-consultation on reducing costs in clinical negligence claims, August 2015: The Law Society 2017 Page 2 of 12

3 defendant to use the more open-ended multi-track process to force the claimant to spend more time on the claim than is allowed for within the fixed cost. This is not just in an individual case; claimant lawyers, whose time on these cases is often not remunerated, will either face economic pressure to settle low and early, or may cease to take on these cases at all. 7 The behaviour of both sides must, therefore, be managed, and a new culture developed. In clinical negligence cases, there is a great imbalance of power and resource between the individual and the state. Whilst maintaining access to justice for negligently injured people, the NHS should create a system whereby lessons can be learned across the whole service. This, in itself, would save money, improve patient care, and decrease the need for litigation. 8 However, given the current highly adversarial culture in these cases, which has become entrenched over many years, a huge culture shift by everyone needs to take place. The Society, as the only representative body of solicitors working on both sides, is well placed to help the Department achieve this. 9 Whilst we are encouraged to see an approach advocating proportionate costs and swift resolution, we have concerns that such a scheme would not lend itself to more complex cases. Even low value cases involve the professional reputation of doctors, and there is an irreducible and relatively high cost to bring these cases. A lower bill for the taxpayer should not come at the cost of preventing injured people from rightfully bringing claims. Recommendations 10 If the Department introduces a FRC system for clinical negligence cases, it is preferable to limit it to damages up to 25,000. FRCs is currently an area of considerable debate, and we welcome the opportunity to engage with policymakers to provide practical insights and shape new proposals. FRCs for clinical negligence should be set at no higher than 25,000, in spite of any recommendation by Lord Justice Jackson in his review of FRCs, or any result of the subsequent Ministry of Justice consultation. 11 We suggest that the Department conducts a full assessment of its final policy against the following proposals, which are currently underway, which will create a holistic and joined-up approach to changes in the civil justice field: Lord Justice Jackson's Review on FRCs; The Government review of the impacts of LASPO; The National Audit Office report on managing the cost of clinical negligence; Changes to the discount rate; The HMCTS reform and modernisation programme. 12 When considering how FRCs may work, it is our view that these components should form the fundamental pillars of a robust scheme: The Law Society 2017 Page 3 of 12

4 A fixed process to match the fixed costs, including challenging poor behaviour on both sides; The adoption of Professor Fenn's cost analysis approach when setting the FRCs, with claimant data added to his analysis if possible - this is the best evidence of the actual cost of undertaking the necessary work; A higher expert cap to incentivise specialists to undertake these cases to the highest standards; No use of a single joint expert; An early and equal exchange of evidence; Strict adherence to exemptions. 13 The illustrative rules and practice direction produced by the Civil Procedure Rule Committee are a good starting point to fix the process if FRCs are introduced. In particular, the Society supports the earlier pre-action exchange of evidence in lower value claims, which should encourage quicker and earlier resolution out of court at a lower cost. It also provides the appropriate framework whereby noncompliance will lead to a case falling out of FRCs and into assessed costs in the multi-track. This is necessary to ensure compliance. 14 However, the existing protocol does not yet create a complete process. It is not clear how contested issues, which do not settle pre-issue, will lead to a just determination. The proposals further frontload costs, which may lead to an increase in cases settling pre-issue, but a sizeable number inevitably will not. The process leading to just determination should not require the pre-issue work to be re-done post-issue at a greater cost. 15 The Society is working with stakeholders from both the defendant and claimant perspective on alternative ways to improve the process, and will continue to do so after the consultation deadline. The Society wishes to engage with the Department on this issue further during their policy formation stage in the form of a working group with a range of stakeholders. Response to consultation questions 1) Do you agree that Fixed Recoverable Costs for lower value clinical negligence claims should be introduced on a mandatory basis? 16 We agree that, if fixed recoverable costs for low value clinical negligence cases are introduced, it should be done on a mandatory basis. Whilst an 'opt-in' system has the potential to create a distortive impact on the market, a mandatory system would maintain an equal footing for both claimants and defendants. 17 However, as previously expressed, we believe that a system for claims up to 25,000 could be successful if the correct exemptions and conditions are put in place to ensure that only those cases suitable for fixed costs fall within the scheme. 2) Do you agree that Fixed Recoverable Costs should apply in clinical negligence claims a) above 1000 and up to 25,000 or b) another proposal. The Law Society 2017 Page 4 of 12

5 18 If a FRC regime is introduced, it should apply to straightforward cases up to 25,000. This value mirrors other FRC regimes, although current schemes fall into the fast-track with a pre-issue portal and a fixed post-issue process. The certificate of value provision in the Illustrative Practice Direction refers to cases up to 250,000. We assume that this is a drafting error and should read 25, Other changes in the civil litigation sphere bear relevance to this consultation, and clinical negligence cases must continue to be recognised as different from other personal injury work. Lord Justice Jackson's Review on fixed recoverable costs is likely to continue until July, but whatever his recommendations, clinical negligence should remain at the lower threshold of 25, The Department may also wish to consider how this regime could integrate into the HMCTS reform programme, which looks at increasing the digital capability of the court system. If one of the Department's primary aims is to reduce the cost of litigation whilst improving patient care, it would be important to work with the HMCTS and the Ministry of Justice on how technology can best be used. 21 There is a potential risk that some specialist solicitors may move away from this work if it is no longer financially viable to conduct lower value cases. This could potentially leave the NHS unaccountable for its errors. 22 Alternatively, a poorly designed FRC scheme could attract non-solicitor claims management companies or non-accredited representatives acting for claimants. This may cost the NHS more money in the long-term if those working on a case are not experienced enough to settle early, or advise clients with unmeritorious cases to drop them. Experienced and accredited clinical negligence solicitors currently play a vital role in triage by advising potential clients that their claim is unlikely to succeed in law. It would, therefore, be beneficial to build a system incentivising accredited solicitors to carry out pre-action work. The Society offers an accreditation programme, which we would be pleased to discuss with the Department in due course. 3) Which option for implementation do you agree with: Option 1: all cases in which the Letter of Claim is sent on or after the proposed implementation date. Option 2: all adverse incidents after the date of implementation. 23 The date of retainer of the solicitor is the most appropriate implementation point, which has been used for similar changes in the past. In clinical negligence cases, the date of 'incident' is not always easy to clearly establish. This would also delay implementation, which may not fit within the Department's objectives. A single fixed date based on Letters of Claim, for example, will create a logjam, and we would expect a significant spike in letters issued prior to this date. To facilitate a smooth transition, practitioners should be able to apply this scheme for all new cases, rather than cases that have already begun. The Law Society 2017 Page 5 of 12

6 4) Looking at the approach, (not just the level of fixed recoverable costs), do you prefer: Option 1: Staged Flat Fee Agreement. Option 2: Staged Flat Fee Agreement plus % of damages awarded: do you agree with the percentage of damages? Option 3: Early Admission of Liability Agreement: do you agree with the percentage of damages for early resolution? Option 4: Cost Analysis Approach: do you agree with the percentage of damages and/or the percentage for early resolution? Option 5: Another proposal. 24 Regarding process, we suggest that Professor Fenn's cost analysis approach, Option 4, is the most suitable option put forward to date. In consultation with members, this seemed to most accurately reflect the costs of these cases in reality, and is firmly based on data. This is in spite of many claimants' concerns that the specific figures appeared too low in general. 25 It should be noted that Professor Fenn only used defendant data, and would have preferred claimant data as well to cross-check his findings. The Society understands that claimant practitioner groups are making data available to him, and we await his further report on the data. 26 As Professor Fenn points out, the majority of the analysis is based on Guideline Hourly Rates (GHRs), which may be a hindrance when setting the rates. GHRs have not been updated for a number of years, and are not universally used across firms. To obtain an accurate reflection, we suggest that it would be more helpful to use actual rates if the data becomes available. 27 Triage costs incurred by firms have not been incorporated into this proposal, and should be included before any cost approach is selected. The vast majority of initial clinical negligence cases are screened out at the triage stage, meaning that there are an abundance of hidden costs in claimant firms. These are not covered by the capped irrecoverable success fees charged in lower value cases. Excluding triage costs would inappropriately fix the overall costs, which may mean that these cases are not even brought. 28 If a FRC scheme is introduced, we suggest that the Department should form a working group, with a range of stakeholders, to collaboratively build a more streamlined process. The objective would be to create a fixed process to sit alongside the fixed costs, which could hopefully be a workable solution for both claimants and defendants. The Society would be pleased to contribute to such a group. 5) Do you agree that there should be a maximum cap of 1200 applied to recoverable expert fees for both defendant and claimant lawyers? 29 There is significant concern from defendant and claimant lawyers alike that the proposed total cap of 1200 for both sides is insufficient and inappropriate. Owing to the irreducible complexity of many clinical negligence cases, expert input in The Law Society 2017 Page 6 of 12

7 a case is vital to determine liability and causation. Although the Society does not oppose the use of expert caps, they must be at a reasonable level to incentivise experts to undertake this work. 30 We are concerned that a 1200 cap is not adequate for experts to produce high quality and substantial evidence. If experts are constrained to work within a given fee, work may be done less thoroughly, and critical pieces of information relevant to the case could be omitted. Based on previous cases, our members reported that a 1200 cap would produce high level reports at best, rather than the detailed evidence that is often essential in these cases. An agreed template for cheaper, short-form reports could be introduced as part of the accompanying process changes. 31 There is a danger that experts will not undertake the work if this cap is imposed. There is a scarcity of experts in some medical areas, and there is often no choice but to use a particular expert with their attached fee. If experts are unable to operate within the cap to make their work economically viable, victims of clinical negligence may be unable to find the support they need. This could have a notable impact on access to justice. 32 Owing to the distinct financial imbalance of the NHS as the defendant in many cases, they have a greater ability to secure expert work in bulk than claimants do. It is feared amongst claimant communities that this cap would be harmful, owing to their lack of buying power. 33 We note that the consultation paper does not mention whether the views of experts have been taken into consideration. In our view, it is crucial that the Department carefully considers their expectations to work within a FRC scheme before implementing a cap of any value. 34 Furthermore, it is unclear how after-the-event (ATE) provisions will work within this proposal, or what the impact will be on the economic viability of the ATE market. We believe that any FRC scheme should be predicated on ATE premiums acting in the same way as they do presently under current legislation. It is important that ATE can be recovered alongside FRCs, and these costs should not be pushed onto the claimant. 6) Expert fees could be reduced and the parties assisted in establishing an agreed position on liability by the instruction of single joint experts on breach of duty, causation, condition and prognosis or all. Should there be a presumption of a single joint expert and, if so, how would this operate? 35 We believe that there should not be a presumption of a single joint expert, and the use of one would be detrimental to the fair running of a case. Breach and causation are the main determinants of a clinical negligence case; therefore, any opinion provided by a single joint expert, even at an early stage, would be highly influential. The Law Society 2017 Page 7 of 12

8 36 Most experts will be current or former employees of the NHS, the defendant, which casts doubt on how independent the single joint expert would be in practice. This may not meet the criteria for a fair determination of the case under the European Convention on Human Rights and the Human Rights Act. 37 Claimant lawyers often use experts to screen out cases at an early stage, which helps to save costs for NHS Resolution. This facility would be lost with a single joint expert. 38 We have doubts whether a single joint expert would accelerate the progress of a case, and we have practical questions about how they would maintain their independence. There is no detail in the consultation regarding how they would be appointed, how they would be paid, what qualifications they would have, and who exactly they would be. There is concern that they could stray into becoming advocates of a case, and a single joint expert could encourage a system of 'trial by expert'. We believe that this would not constitute a fair trial. 7) Do you agree with the concept of an early exchange of evidence? 39 Yes. We agree that an early exchange of evidence would be beneficial to encourage more timely resolution, so long as parity is maintained for all parties. Early exchange of information upfront leads to the disclosure of evidence that could lead to an early settlement. There would be no need to serve a CPR-compliant report at this stage, as these could be converted later if needed. Anecdotal feedback from members has indicated that admission of liability from NHS Resolution varies hugely, so early exchange may mean that this becomes more consistent. 40 It is common practice for defendants to obtain short-form reports to inform the Letter of Response, and it would be a change in practice for these to be disclosed. Likewise, it would be a new way of working for claimants to obtain and disclose a short-form report; at present, a CPR-compliant report would usually be obtained at the outset. If the Department determines that costs considerations in respect to these low value claims outweigh other considerations and require a shorter report, this could save money if the case settles early. However, consideration needs to be given to cases that do not settle, as production of an additional CPR-compliant report could duplicate work and increase cost. 41 The illustrative Practice Direction suggests sequential exchange of expert evidence, which would be appropriate for cases up to 25,000 within an overhaul of process, culture and costs. Sequential exchange would give the defendant the opportunity to admit breach or make an offer, both without admission and the expense of obtaining its own evidence in appropriate cases. However, some claimant lawyers view this as the sacrifice of a long-established principle of mutual exchange, and believe that a culture change is needed to make this work. There is fear that the defendant's expert could tailor their report after sight of the claimant's evidence, which would negate the benefits of sequential exchange completely. 42 We envisage that an expert template could be beneficial for both sides if they fitted appropriately within the FRC scheme. This could speed up the process, and The Law Society 2017 Page 8 of 12

9 ensure that expert evidence is provided on an equal basis. However, this should not inhibit an expert's ability to compile a detailed report on a case, and there should be detailed stakeholder engagement before any template is rolled out. 43 In our view, the proposed process does not yet deal adequately with the possibility that a case may not settle pre-trial. If a case does go to trial, it follows that a judicial determination stage should be as streamlined as the previous stages, and maintain the time and cost saving benefits. The Society would be pleased to explore what this stage may look like with the Department if the response to this consultation concludes that a fixed costs scheme will be introduced. 8) Do you agree with the proposals in relation to: a) Trial costs. 44 We believe that it is right that trial court costs should be paid in addition to the final stage fixed costs. In these circumstances, additional costs should allow both the trial advocacy fee for counsel/solicitor advocate and the solicitor's costs of attendance to support the advocate. It is incredibly difficult for an unaccompanied advocate in clinical negligence cases to adequately handle client support, witnesses, bundles and evidence, which makes these costs vital. 45 Advocacy fees should be higher than presently allowed in the fast track, as cases are more complex and require significant pre-trial preparation. Provision should also be made for appropriate use of counsel/specialist solicitor input for drafting particulars of claim and for advice in issued cases. b) Multiple claimants. 46 If a fixed recoverable cost scheme concerns multiple claimants, it should be excluded from the FRC scheme, owing to its complexity. c) Exit points. 47 We welcome the Department's recognition that clinical negligence cases are wide-ranging and more complex than claims already covered by FRC rules, and an exception to FRCs under 'exceptional circumstances' should be incorporated into this scheme. As already stated, FRCs should only apply to genuinely simple cases, and it would be inappropriate to impose set FRCs on a complex case. 48 Non-compliance with the fixed process should lead to an exit from the FRC scheme into the multi-track. This is similar to non-compliance with the portal process in personal injury cases, which leads to an exit from the portal into the fast-track. d) Technical exemptions. 49 We believe that exemptions listed in paragraph 6.9 of the consultation document should be included, in order to preserve access to justice and maintain consistency with other FRC schemes. The Law Society 2017 Page 9 of 12

10 50 We recommend that Part 36 offers should override a FRC scheme to both encourage and reward early resolution. 51 We believe that it may be productive for the Department to draw up a system of allocation for cases that could fall within the FRC scheme, set alongside a set of guiding principles. We would be pleased to help create this. e) Where the number of experts reasonably required by both sides on issues of breach and causation exceeds a total of two per party. 52 A case requiring more than two experts per party is a strong indicator of the scale of its complexity; therefore, they should be automatically exempted from a FRC scheme. f) Child fatalities. 53 As a point of principle, all fatalities, not just child fatalities, should be excluded from this scheme. These cases deal with a highly sensitive issue and are emotive, which we believe makes them unsuitable for FRCs. 54 In addition, families can currently usually obtain representation at inquests, where the Trust is often professionally represented, as the cost will normally be recoverable as part of the costs of a subsequent clinical negligence claim. In a FRC scheme, this will not be possible, meaning that families will lose the possibility of representation at the inquest entirely. g) Interim applications. 55 We agree that both the use and cost of interim applications should be controlled. If an interim application uncovers poor behaviour on a particular side, this could lead to removal from the FRC scheme. Alternatively, cost sanctions need to be a sufficient deterrent to poor behaviour. The current fixed application fee in the fasttrack is totally inadequate for this purpose. h) London weighting. 56 Appropriate London weighting should apply to those working within this area to ensure that the FRC scheme operates evenly. 9) Are there any further incentives or mechanisms that could be included in the Civil Procedure Rules or Pre-Action Protocol to encourage less adversarial behaviours on the part of all parties involved in lower value clinical negligence claims, for example the use of an Alternative Dispute Resolution process (ADR)? This would include both defendant and the claimant lawyers, defence organisations including the NHSLA, the professionals and/or the organisation involved. The Law Society 2017 Page 10 of 12

11 57 In our view, measures to control adverse behaviour from either party are fundamental components within a proposal designed to improve patient safety and promote a culture of learning in the NHS. This will decrease litigation in the future, and prioritise better care for patients. 58 Our members have anecdotally reported that many claimants' main objective when bringing a case is to ensure that key lessons have been learned. The Public Administration and Constitutional Affairs Committee in the House of Commons recently recommended that: 'the Secretary of State for Health should be accountable to Parliament for delivering the coordinated implementation of the shift towards a learning culture' 2. Government policy on Duty of Candour needs to be fully integrated into a FRC scheme, in order to enshrine this principle set by the Secretary of State himself. 59 One of the primary aims of this scheme is to encourage early resolution, and it, therefore, seems sensible to include exit points that would deter poor defendant behaviour. For example, non-compliance or delay by the defendant could trigger an exit point out of the FRC scheme, or there could be a system of enhanced FRCs for swift and early resolution. 60 We envisage that a prior Letter of Notification could be beneficial before the case enters a FRC scheme. These letters can often encourage early resolution and Part 36 offers. This would also give the defendant the opportunity to admit liability and save costs. 61 Alternative Dispute Resolution may have a place in a FRC process, but only if the cost is factored in. In lower value cases, there is a risk that compulsory ADR could increase cost with little productive outcome. 10) Please provide any further data or evidence that you think would assist consideration of the proposal, particularly for other than NHS provision. 62 We recommend that a full assessment of the impact of LASPO should be undertaken before any FRCs are set and any scheme is introduced. The 2013 LASPO reforms not only restricted access to legal aid in these cases, but they also introduced additional liabilities to be payable by the successful claimant rather than the unsuccessful defendant. Post-LASPO cases are still passing through the system, and it is impossible to accurately predict an appropriate level of FRCs without undertaking a substantive analysis first. 63 We note that the rise in court fees has not been taken into account, and this change is already placing a burden on a claimant's ability to engage in the judicial system. Changes in VAT rates have also not yet been considered. Both of these are part of the context in which a FRC scheme will be introduced. 2 House of Commons Public Administration and Constitutional Affairs Select Committee report, 'Will the NHS never learn?' January 2017: The Law Society 2017 Page 11 of 12

12 11) The Government has prepared an initial assessment of the impact of Fixed Recoverable Costs on equalities, health inequalities and families. This assessment will be updated as a result of the consultation. Please give your view on the impact of these proposals on: Age, Gender, Disability, Race, Religion or belief, Sexual orientation, Pregnancy and maternity, Carers, Health Inequalities and Families. 64 If the appropriate exemptions and caveats are not put in place in a FRC scheme, this will prevent victims of clinical negligence from obtaining access to justice. There is concern that claimants will not be able to bring their claim if a FRC scheme adversely affected access to specialist advice from both experts and solicitors. This would disproportionately affect those who are vulnerable in society, particularly the elderly, the disabled, and those on low incomes. FOR FURTHER INFORMATION Kate Fairhurst Policy Adviser - Civil Justice kate.fairhurst@lawsociety.org.uk The Law Society 2017 Page 12 of 12