legalchap: The bitterest pill

I see that another debate has kicked off about how to make savings in the NHS, efficiency expert Lord Carter concluding that up to £5 billion could be found. I don’t know the merits of that and the true potential. In principle it’s a perfectly valid discussion to have – as long as one keeps an open mind to the possibility that it’s further investment, not cuts, that we need.

It won’t be long before the old cracked record comes out of its sleeve and we are being told that the biggest drain on the NHS is the army of “ambulance chasers” and “fat cats”. That will be lawyers acting for victims of clinical negligence.

In this country we have, and have had for hundreds of years, laws that require (put in very simple terms) people who act carelessly to compensate other people who are injured and suffer loss as a result. We all fall into error during the course of our daily life, often without any dire consequence.

Sometimes, though, it happens whilst we are driving a vehicle, operating machinery or performing some other skilled task. Acts of Parliament and other subordinate legislation define and refine the standards that must be met as well as prescribing in many instances insurance to meet awards of compensation – and dare I say it, victims’ costs.

All this doesn’t exist just because somebody thinks it a fine idea for the sake of it. It is not there to create an industry – to feed “fat cat” lawyers. It exists, as should all our laws, for moral and humane reasons.

One is that we are (or were) a caring society that helps those who have been the unfortunate victims of somebody else’s error, rather than simply shaking our heads, pursing our lips and leaving them to get on with it. Just as - if not more - important is the deterrent effect, to put it in blunt terms.

Positive aspects of every misfortune are that it is a reminder of the risk and potential consequences – a prompt to be more careful next time. We don’t rely on the wrong-doer’s conscience alone, though in many cases that will be the most powerful control of future behaviour. Awards of compensation not only help the victim but also hit institutional culprits where it hurts, where it will make them think again.

Even if they have insurance, there will be an effect because those underwriting the cost will by various means require better standards of behaviour in future as well as upping the price of what they provide. Of course insurers, particularly those in the road traffic market, don’t see better behaviour as the only way forward. They will fight by any means to avoid paying compensation – which achieves neither of our society’s aims (above).

Often, and quite rightly, they lose and have to pay more. Then they whinge and want the law changed. They are about to have some startling success with their friends in the current government - but that is another macabre tale…

So, back on the ward, how do we save money? Well, I have two suggestions.

Before I tell you, here is a clue to what they might be. Ask yourself why in any particular case, the NHS should have to pay compensation to somebody who claims they have been the victim of clinical negligence and costs to their lawyers. Is it as simple as somebody coming out of the hospital, accusing the medical professionals of carelessness and demanding huge sums of money?

If you are struggling with that last question, let me help you also with the information that the laws are applied by courts staffed by judges who are generally quite clever and more to the point independent and objective people. Contrary to what liability insurers might suggest to you, they are able and willing to sift out weak and dishonest claims - if they get that far.

Guess what happens to the people running those cases? One thing above all – they don’t get any money, nor do their lawyers – assuming, as is almost always the case, that they are acting on conditional fee terms.

Turn that around and you will understand, if you didn’t already, that money only spills out of the public purse when a judge decides that it should by law or those defending the claim see that as the likely end result and sensibly get to work on some damage limitation.

So the first solution is prevention – try harder not to cock up in the first place.

I am no more certain of the recipe for that than all the clever people who have allegedly worked on the problem before but I imagine it looks something like better training, improved hours, better pay in some cases, improved performance management etc.

Oh dear! That’s going to cost money isn’t it? Light bulb moment…that investment may ultimately save money that we are currently having to pay for messing up. Oh, and there is another minor benefit of that scenario – fewer people die or have their lives ruined along the way.

Looks good to me. It won’t be foolproof, of course, because nothing and nobody is perfect. But even after the event, we can make things better than they are at the moment. How? Easy…

What you do is inspire, failing that order, those handling claims on behalf the NHS to act sensibly, to promptly admit fault where they should and agree reasonable sums of compensation. The most disarming response in most situations where a person is angry at another for what has happened to them is for the wrong-doer to stick their hands up and say “sorry”.

That is not all of it, because people still need to be compensated according to the moral standards that we maintain in our society – but it is a damn good start!

The National Health Service Litigation Authority (NHSLA) is famed for not doing this. Just recently we have seen a reported case where the NHS has been penalised for refusing to sit down and talk, to participate in mediation.[1]

That's a damning indictment of itself but here is the sickly icing on the rotten cake – the judge (quite correctly) hit them with an enhanced costs order so they have had to pay even more to the innocent victim.

This is just dumb.

Meanwhile, the government is after a placebo, not a cure. In clinical negligence claims, the current thinking is to fix and cap costs of lawyers acting for the victims.

“Surely that is a good thing?” you may be asking yourselves. That is going to cut down the costs paid in successful cases (i.e. where the claimant deserves it) because there must be (yes there are) some unscrupulous people including lawyers intent on milking the situation.

But we already have a system of costs assessment – always have had - which means that, just like the claim itself, if the defendants think they are being taken for a ride then they force the argument before a judge who will limit the payment of costs to what is reasonable and if appropriate award the defendants their costs of bringing the argument to the court.

It has already become much more restrictive than it used to be. For eleven years, we had a very clear statement of principle handed down by the Court of Appeal in 2002[2] about the need for costs to be proportionate but carving out an exception where obstructive behaviour by defendants generated what would otherwise have been unnecessary additional costs. In other words, if defendants mucked around and kicked up a fuss rather than focusing on resolution of the claim, they could expect to be ordered to pay for all the extra time and money wasted as a result.

Even that has gone now. New rules on proportionality basically say that the court can scrutinise all the elements of the claim for costs, decide on a sum that is reasonable and then slash it in half or more simply because it is out of proportion to the value of the claim.

So why bring the claim if it is going to cost, say, twice or three times the value to pursue it? Assume that it is a perfectly good claim but those costs are generated because the defendants simply won’t face reality and get it resolved at an early stage.

You may say that the sensible thing for the claimant to do is to give up, perhaps even before they have started. That is of course exactly what the insurance industry and major institutional defendants like the NHS want to happen.

We are set to go a stage further now with a scheme of fixed costs. “Fixed” doesn’t necessarily mean “unreasonably low”, of course but I will wager that is where we get to.

Many lawyers will remember the initial levels of costs within the portals for dealing with low value road traffic claims, negotiated by agreement between the two sides of the industry and felt to be fair to both sides.

Subsequently the insurance industry pumped up the level of referral fees that they were trousering for handing some lawyers cases to run against them, then said that most of the fixed costs went on referral fees, rushed round for an exclusive clandestine huddle with Mr Cameron and chums in Downing Street and had the figures slashed by more than half.

Such is the way, generally, that the law is now being manipulated in this country. Whether it is to the financial benefit of, initially, insurers or the government the response to the cost of misfortune of innocent victims and mismanagement of claims is to try and deny them justice.

Such is the culture within the NHSLA at present. We don’t care if we ruined your life and/or the lives of your family and friends and we don’t much care if it happens again. We are not paying you.

If the only way to ensure that is to kneecap the lawyers who will otherwise force us to pay for our mistakes, then that is what the government will do.

Silence the critics, so we don’t have to answer to them.