Our Business Development Director, Matthew Gwynne, discusses the recent NHSLA report.

Publication of the NHS Litigation Authority’s (NHSLA) annual report is usually the spark for a, shall we say, lively debate over who’s to blame for ever-rising legal costs in clinical negligence claims.

The 2015/16 report came out in July and showed that the NHS paid out more than £1.4bn to patients and their legal representatives, up from £1.1bn the year before.

It said the rise reflected the high numbers of new claims received over recent years which were now falling for payment. A 43% increase in claimant legal costs – from £292m to £418m – was another significant factor in the rise. Defence costs rose 16%, from £103m to £120m.

The good news from the last year was that new claims fell by 4.6% to 10,965, and the report details the work the authority has been doing to support and incentivise NHS organisations to improve patient safety, including through learning from clinical negligence claims.

Interestingly, the number of cases resolved without paying any damages reached a new high of 4,935, although the reasons for that are not spelled out – could it be bad claims, or people running out of funding, or other forms of resolution, such as an apology? The report highlights the success of the NHSLA’s mediation pilot and that it plans to put this on a formal footing.

Fewer than 1% of the claims resolved went to trial, and although the actual number increased from 85 to 124, the NHSLA kept up its 60% trial success rate.

The big focus of late has been on lower-value claims, with the government apparently still intent on introducing fixed fees for such claims – although whether the limit will be £100,000 or £250,000, we don’t yet know – and also removing the last bit of recoverability in relation to after-the-event insurance for an initial expert report.

The report ramps up the pressure. It said that legal costs now account for 55% of the value of clinical negligence claims worth less than £100,000, a figure that has risen more than steadily over the previous decade. It was 35% in 2005/6.

More generally, it said: “We continue to target overcharging by claimant law firms, challenge bills and points of principle at court, and report poor practice to the Solicitors Regulation Authority as appropriate. We also ensure that our legal panel is instructed at agreed hourly rates or fixed fees appropriate to the value of the case.”

For example, the NHSLA recently issued a press release trumpeting its success in challenging ATE premiums, saying it has reduced premiums in 30% of cases in the past year, saving more than £6m.

Commenting on the report, NHSLA chief executive Helen Vernon said: “The key to reducing the growing costs of claims is learning from what goes wrong and supporting changes to prevent harm in the first place. We want to reduce the need for expensive litigation. This means increasing the use of mediation in the NHS, early transparency, saying ‘sorry’ and demonstrating that lessons have been learned to prevent the incident happening again.”

The authority certainly says the right things, but does this positive, co-operative attitude actually filter down to its panel firms and the way the NHS defends claims on the ground? The answer I get from claimant solicitors is a resounding ‘no’. We hear that a lack of responsiveness, delays, and fighting until admitting liability at the last minute are all continuing features of dealing with clinical negligence claims.

This is where we add value to claimant lawyers. Clinical negligence claims quickly build up a lot of WIP and we often see that while drawn-out proceedings do not lead solicitors to undersettle the substantive case, they can encourage them to undersettle their own costs, just so as to get some money through the door.

That is not how you run a profitable business. Our Costs Account facility – which enables firms to receive advances against their costs and disbursements once cases have settled – has already proven a simple but effective method for law firms to stand up for themselves and not compromise when it comes to what they are due. Many clinical negligence cases require real expertise and specialist solicitors should not sell themselves short in the name of cash flow.