Government to impose £100,000 cap on clinical negligence legal fees

The government has revealed plans to cap 'excessive' legal fees charged by lawyers in clinical negligence cases, in a bid to free up over £80m a year of NHS funds.

Ben Gummer: Government plans cap on clinical negligence fees
Ben Gummer: Government plans cap on clinical negligence fees

Under DH proposals, fees charged by lawyers for clinical negligence cases will be subject to ‘strict limits’ of £100,000, with the fee provided reflecting a ‘proportionate’ percentage of the compensation received by the patient.

There is currently no limit on legal fees, even if the compensation claim is small, allowing ‘unscrupulous’ lawyers to charge ‘extortionate fees for low-cost cases’, the DH said.

Claimant lawyers charged the NHS litigation authority (NHS LA) in excess of £259m in legal fees for clinical negligence claims during 2013/14.

The plans were welcomed by medico-legal organisations, who have repeatedly raised concerns about mounting legal costs driving up indemnity fees.

Rising costs for GPs

The Medical Defence Union (MDU) said it regularly saw claimant solicitors charging hourly rates of over £400, causing legal costs to ‘often far exceed the underlying compensation claim’.

The DH pointed to one case where a lawyer charged £175,000 in legal costs, dwarfing the £11,800 received by the patient in damages.

In another case, the quoted legal bill was in excess of £80,000, while the patient only received £1,000 in compensation. This was later reduced to under £5,000 by the courts after the NHS LA successfully challenged the fee.

But the process of taking cost claims to court is a ‘time and cost-consuming’ process in itself, which could be avoided if fixed costs were introduced, the DH said.

NHS compensation claims

Health minister Ben Gummer said: ‘Unscrupulously, some lawyers have used patient claims to load grossly excessive costs onto the NHS and charge far more than the patient receives in compensation.

‘These financial controls will ensure money is pumped back into patient care.’

Ministers will now consider the proposals ahead of a formal consultation in autumn.

Emma Hallinan, director of claims and litigation at the Medical Protection Society (MPS) said a new approach was ‘desperately needed’.

She said: ‘We have been calling for a fixed cost regime to help address the rising cost of clinical negligence, and it is fantastic to see that government plans to cap excessive legal fees that are placing such a burden on the public purse.

‘There are further actions that can be taken to make the cost of clinical negligence more affordable for society, but this is an excellent start and we look forward to working with the DH on the detail of their new approach.’

Affordable GP indemnity

The Medical Defence Union (MDU) said it welcomed the move to make legal fees in clinical negligence claims ‘more affordable and proportionate’.

Its professional services director, Dr Matthew Lee, said: ‘Even with the 2013 reforms, high legal costs charged by claimant solicitors continue to be a major part of the cost of clinical negligence claims.

‘Unfortunately although they are too high, legal costs are not the main reason for the staggering estimated £25.6bn NHS bill for clinical negligence claims. We would also like to see the government do something to contain the spiralling cost of compensation awards with claims inflation rising at 10% per year. We also need legal reform to make damages payments affordable, sustainable and fair for all parties.’

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