The Government has set out proposals for capping the amounts law firms can recover for costs related to low-value NHS negligence cases.
The move, aimed at cutting the NHS bill for litigation and spiralling indemnity fees, comes as associated legal cost claims often dwarves the actual negligence payment to the patient, the health secretary said.
In one case lawyers claimed £83,000 in legal costs where a patient had been awarded £1,000, said the Department of Health, adding that legal costs made up 34% of the £1.5bn NHS litigation bill last year.
The DH consultation, launched yesterday, proposes caps for ‘low value’ claims between £1,000-25,000 in a bid to save the NHS £45m a year.
The consultation looks at where costs would be set, how claims can be resolved at an earlier stage, and how the process can be made less adversarial.
But some of the models propose a cost reduction incentive when a defendant admits liability at an earlier stage, or fixes costs dependent on the stage of litigation that the claim is settled.
The consultation document says: ‘The Government believes that a [Fixed Recoverable Costs] scheme will improve the proportionality between claimant costs and damages, and claimant and defendant costs in lower value clinical negligence claims.
‘This will support the earlier resolution of claims for the benefit of all parties. FRC will release savings for investment in frontline NHS patient care.’
Health secretary Jeremy Hunt said legal action ‘should only be one part of the process’ when significant mistakes are made, but it was important that patients can discuss what went wrong and what action is open to them.
He added: ‘Unfortunately, what we often see in lower cost claims is a deeply unfair system where unscrupulous law firms cream off excessive legal costs that dwarf the actual damages recovered.
‘We believe this creates an adversarial culture of litigation, which is inflating insurance premiums and drawing away resource from the NHS at a crucial time.’
Indemnity providers said the scheme was a first part in reducing the growing burden of indemnity on GPs, with further reform pledged in the GP Forward View alongside reimbursement of fee inflation for two years.
Emma Hallinan, director of claims at the Medical Protection Society, said: ‘The cost of clinical negligence risks becoming unsustainable for the NHS and society…We are pleased Government is tackling this important issue; a package of legal reforms is desperately needed.’
GPC deputy chair Dr Richard Vautrey said: ‘Legal bills that accompany negligence costs are currently picked up by medical defence organisations, and that translates to inflated premiums for their members.
‘So reducing the legal costs in these types of cases is certainly something we would welcome, but we would need to look at the practicalities of how we would do that.’