The high cost of clinical negligence claims paid out by the NHS is a major factor driving up indemnity costs. The NHS paid out £1.7bn in 2016/17 - 37% of which was legal costs.
Medical defence organisations (MDOs) had called for a cap on legal fees in all clinical negligence cases worth up to £250,000 - warning that lawyers' fees in low-value cases often exceed compensation paid to patients.
However, a review by Lord Justice Jackson has recommended that legal fees should be capped only in cases worth up to £25,000. The review says: 'The Civil Justice Council should, in conjunction with the DH, set up a working party, including both claimant and defendant representatives, to develop a bespoke process for clinical negligence claims up to £25,000, together with a grid of fixed recoverable costs for such cases.'
MDOs warned that the recommendations did not go far enough, and would have to be revisited to address properly the cost of clinical negligence claims.
Dr Matthew Lee, MDU professional services director said that each government review on litigation seemed to be 'more watered down in terms of having an impact on the overall burden to the NHS of the tide of litigation' than the last.
'Patients who believe they have been negligently harmed must have access to justice, but fixed costs are fairer and could, and indeed should, be applied to all cases valued at up to £250,000,' he said.
'In lower-value claims, claimant lawyers’ fees are still, on average, above the level of damages awarded and that cannot be right. If these proposals are only applied to the lowest value cases then the problem will not be fully addressed.'
Emma Hallinan, director of claims and legal at the MPS said: 'We welcome Lord Justice Jackson’s important review into fixed recoverable costs. In lower value clinical negligence claims it is not unusual to see lawyers' costs exceed the compensation awarded to claimants, and this is simply not right.
'MPS had hoped to see a bold recommendation on the threshold, with cases up to the value of £250,000 included. Disproportionate legal fees are still a significant issue for claims up to this value and the financial benefits to the NHS would be even greater if the threshold was higher. While disappointing, a £25,000 threshold would be a positive first step.
'A fixed recoverable costs scheme is one of a number of legal reforms that will be needed if we are to tackle the spiralling cost of clinical negligence.
MDDUS chief executive Chris Kenny said: 'Lord Justice Jackson’s review has taken a very narrow perspective on the question of fixed recoverable costs in medical negligence cases, with a proposed limit of £25,000, and fails to engage with the wider impact of unjustified litigation on the NHS and GPs.
'This report underlines the need for the DH to complete its more holistic and thorough review (with the benefit of the many and detailed submissions to which Jackson will not have had access) and produce more balanced and ambitious action.
'The DH must do more than simply rubber stamp Jackson’s recommendations in this complex field. Today’s small step does not come close to turning around the cost and litigation tanker.'