NHS Compensation Claims Costing Too Much?
Compensation claims put huge demands on NHS
A 16-fold rise in the cost of no win, no fee legal claims against the NHS in the last five years is putting massive demands on the organisation’s resources and its ability to redirect funds into treatment, according to a new report. The NHS Litigation Authority (NHSLA) has reported a ‘significant increase’ in the number of claims in the last year and commentators are concerned that this could be disastrous for the NHS.
The Liberal Democrat health spokesman Norman Lamb has expressed concern that compensation claims are ‘spiralling out of control’. He went on to say that the amount of public money being paid out in compensation and in particular legal fees is becoming ‘intolerable’.
The NHSLA reported that last year, clinical claims rose by more than 11% to almost 6,000. Non-clinical claims rose by more than 10% in 2008-9 compared with the previous year. The amount paid for all clinical negligence claims rose from �£661million in 2004-5 to �£807million in 2008-9. The NHSLA has complained in particular about the rising costs charged by claimants’ solicitors under no win, no fee agreements, which the Authority claims amounts to almost 38% of all damages paid. In contrast, they say that defence lawyers’ fees amounted to only 13.2% of damages paid out by the NHS.
So are no win, no fee lawyers sucking the NHS dry of money? The report throws a damning light on the costs involved, and the figures are sure to make headlines for weeks to come. Senior NHS officials have long argued for radical reforms in the way that solicitors’ costs are calculated, particularly in low-value claims. A report from Lord Justice Jackson in 2009 recommended that legal costs should be paid out of the victim’s compensation award, but solicitors are strongly opposed to this course of action, saying that the victims of medical negligence would end up paying as a result. The report also suggested that ‘success fees’, which many solicitors charge if they win a case, should be capped to 25% of the compensation awarded. If the NHS and the Law Lords decide to go with Lord Jackson’s recommendations, that could dramatically reduce the amount of compensation victims actually receive.
With some reports of solicitors receiving over �£100,000 in fees for a compensation award of just �£2,000 hitting the headlines, is it as clear as it seems that some are doing too well? Well as with anything, the answer is not as clear as you might think. Medical Negligence claims lawyers often act on a “no win no fee” basis, meaning that for many medical negligence claims that they try and help clients with, they recover no costs at all if they do not win the claim. This means they can spend many hours on a case costing them thousands of pounds, and if they lose they are paid nothing. So whilst on some cases the costs seem disproportionate, on other cases the lawyer will receive nothing. It also needs to be remembered that often the costs increase because the NHSLA does not settle claims early enough. The legal profession would rather see stricter guidelines enforced on a fast procedure for medical negligence claims, rather than penalising the victim by extracting their fees from the compensation award.
Demands for a restructuring of the medical litigation system are nothing new. For the past decade, this question has been revisited time and again, yet nothing seems to have changed. With more people taking up the no win no fee medical negligence claims options and the NHS particularly vulnerable to litigation by disgruntled patients, the problem is only going to get worse. There is no doubt that something has to give - before the NHS runs out of money.
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