Mandatory cap on lawyer fees 'may not go far enough' to cut GP indemnity costs

The DH has launched plans for fixed limits on the amount lawyers can receive in lower-value medical negligence claims, but experts say the measures may not go far enough to bring down soaring GP indemnity costs.

The annual cost of clinical negligence to the NHS in England has been rising progressively, climbing from £1.2bn in 2014/15 to £1.5bn in 2015/16 – with legal costs comprising 34% of total NHS expenditure.

Indemnity fees for GPs have soared as the cost of claims rose. A GPonline poll last year found that nine out of 10 GPs had seen their medical indemnity fees increase in the year to July 2016, many of them by 20% or more.

The government has now proposed a mandatory system of fixed recoverable costs (FRC) that limits how much lawyers can claim in fees in lower value clinical negligence claims.

Under the proposals, outlined in a DH consultation, fees will be fixed for all cases in which awards fall between £1,000 and £25,000.

GP indemnity

Around two in every three (60%) claims settled for damages fall into this range, with claimant recoverable costs usually often totalling two to three times the value of damages awarded.

The proposed reforms would apply for claims across the NHS, not-for-profit and private healthcare providers in England and Wales.

The FRC would be based on those already introduced in other categories of personal injury claims, including for road traffic accidents, employer liability and public liability.

These already operate with an upper limit of £25,000 – and the DH opted to ‘initially’ go in-line with these before potentially setting the limit at a higher level, such as a previously-proposed limit of £250,000.

The Medical Defence Union (MDU) welcomed the proposal, but warned that the changes would not go far enough to make a meaningful difference.

Negligence claims

Dr Matthew Lee, MDU professional services director, said: ‘Fixed costs for legal fees are long overdue as we are still seeing fees charged by claimants’ solicitors that far exceed patients’ compensation.

‘However, we are disappointed the caps are proposed only for claims where the level of compensation paid is between £1,000 and £25,000.’

Chris Kenny, CEO at the Medical and Dental Defence Union of Scotland (MDDUS), said: ‘MDDUS strongly supports the early implementation of a fair system for resolving clinical negligence claims. The objective should be the timely, proper and just compensation for those wrongly damaged.

‘Money expended in compensating for clinical accidents should, as far as possible, find its way to the injured patient and not disproportionately to the lawyers supporting those patients’ claims.

‘The proposals will ensure far tighter management of costs at the level of the individual case, but it will have the right incentive effects in ensuring that strong cases are selected and prepared in the most cost-effective manner. That enhances, rather than subtracts from, access to justice.’

Photo: Julian Dodd

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