Lawyers growing rich on NHS negligence

The lobbying in advance of Lord Justice Jackson's final report on his Review of Civil Litigation Costs continued to the last moment with The Times (see link) reporting on excessive legal costs in clinical negligence matters.  No doubt all true, but it didn't seem to add much to a similar article from The Times headed "Lawyers get more than victims in NHS compensation scandal" (see link) published back in March 2009. 
 

The law firms costing NHS millions

The Sunday Times followed on from last week's attack on the costs paid out in clinical negligence cases (see previous blog) with a Top 10 list of the firms who were paid the most by the NHSLA in 2007/08:

Irwin Mitchell £10.75m

Leigh Day £4.87m

Pannone LLP £4.83m

McMillan Williams £3.01m

Kingsley Napley £2.96m

Gadsby Wicks £2.40m

Russell Cooke £1.86m

Challinors Lyon Clark £1.58m

Keeble Hawson £1.55m

Withy King £1.53m

Total: £35.34m

The list was presumably meant to be a Hall of Shame but one suspects that there will be a number of firms looking at the list and their one regret will be that that they were not higher up the list.

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"NHS leeches"

Although The Legal Costs Blog is unashamedly defendant biased, and always ready to have a go at claimant lawyers, even we were somewhat taken back by the attack launched on claimant clinical negligence lawyers in yesterday's Sunday Times.

One article was headed "Lawyers use NHS as £100m cash cow" and another "Lawyers get m0re than victims in NHS compensation scandal". The leading article ran with the headline "Taking a knife to the NHS leeches". The source of this fury seems to have been The NHSLA submission to civil litigation costs review.

The NHSLA paper states that "the whole costs structure is indefensibly expensive in relation to the compensation awarded or agreed". It highlights the large discrepancies between the amounts charged by defendant and claimant lawyers in clinical negligence cases and claims that "claimant legal costs are more than double the defendant legal costs on average and that the gap ... has been widening over recent years".

The impact of CFAs is particularly criticised, with it being claimed that "they are effectively a means of claimant lawyers virtually doubling their profit costs having cherry-picked their cases". It also claims that the effect of CFAs is to produce hourly rates of potentially over £800 an hour.

The papers makes a number of proposals for reform including the introduction of routine costs capping orders and fixed staged success fees.

The NHSLA's submission paper is for the benefit of Lord Justice Jacson's ongoing review of the current costs system. It appears that it is now being generally accepted that he really has neither ruled anything in nor ruled anything out. We can now start to expect a growing number of similar submissions from various interested parties trying to influence his thinking.

The Sunday Times leading article concluded: "The NHS Litigation Authority is right. We need to reform this process and end the party for lawyers." It is fair to say that the Sunday Times is not an entirely uninterested party. The Ministry of Justice is currently engaged in the Controlling costs in defamation proceedings consultation. The press has been attempting to limit CFA funded costs in such claims and a general attack on claimant lawyers' fees will do no harm to that cause.

It might be thought that the Jackson review is coming rather late in the day. Given the damp squib that, so far as costs proposals went, emerged from the Ministry of Justice's Response on the new claims process it seemed that the current government had no real appetite for a major shake-up of the current costs system. However, the Sunday Times quoted Mark Simmonds, the shadow health minister as saying: "It is unacceptable in some cases that the legal fees are many times higher than the awarded damages". With there being every chance of a new government next year, anything now looks possible.

Just as costs draftsmen and other costs professionals were beginning to think there might be some stability emerging, it now looks as if we are in for another period of uncertainty.

Good news for costs draftsmen and costs consultants

In a previous posting I reported some good news for personal injury lawyers and, in due course, costs draftsmen and other costs professionals in the announcement that clinical negligence claims were predicted to increase.

Similar good news comes in a survey conducted by legal recruiters ASA, carried out among law firms. Only 18% expected the economic downturn to adversely affect them, with 46% expecting work to increase. One partner was reported as commenting: "people are always more likely to claim when money is tight".

Further, in the current edition of Litigation Funding, Peter Smith, managing director of ATE insurer FirstAssist, was quoted as reporting a 40% increase in the past few months in the number of professional negligence cases it had funded. He stated: "Everything suggests that if you are unhappy with work that's been done, then you might fight harder trying to obtain recompense during the credit crunch".

In the next 12-24 months, costs draftsmen and costs consultants can expect to see an upturn in work. So long as contingency fees haven't been introduced first.

Put an end to excessive legal costs says MDU

The following comes from a Medical Defence Union press release dated 1 February 2009:

In an editorial in its Journal published this week, the MDU, which represents over half of UK doctors, questioned the fairness of Conditional Fee Agreements (CFAs), which account for around 19 per cent of UK medical cases brought against MDU members. It revealed that claimants’ solicitors may demand 50 per cent higher hourly rates than defendants’ solicitors and that the costs awarded in cases brought under CFAs were significantly higher. For example, in the last three years, in those litigated CFA cases where the average damages were £5,000, the average claimants’ costs were more than four times higher at £22,000.

Dr Karen Roberts, MDU medico-legal adviser and Journal Medical Editor said:

“Of course, claimants who have been negligently harmed by their doctor should be compensated, but a system that provides solicitors’ firms with rewards which dwarf the value of a claim needs to be reformed.

“The number of clinical negligence cases the MDU sees is not increasing, but the cost of settling cases is rising by more than the rate of inflation. Legal rulings such as the recent Thompstone Judgment can make a difference, which is particularly dramatic for the NHS because it has so many high-value claims for babies who suffer neurological damage. MDU members’ claims, which arise out of care delivered in the primary and independent sectors, are not affected to the same degree and members will not see a dramatic rise in their subscriptions. However, in common with the NHSLA, we see one of the key inflationary factors as the excessive legal costs awarded to claimants’ solicitors. I t cannot be right that legal firms should continue to receive payments out of all proportion to the amount of damages awarded, particularly when these costs are funded, ultimately by the taxpayer.”

In the Journal editorial, Dr Christine Tomkins, Deputy Chief Executive of the MDU proposed a two-fold approach to addressing the issue of CFA costs. She wrote: “We propose first that the inequities introduced by very high success fees could be addressed by capping the success fees chargeable by claimants’ solicitors in CFA funded negligence cases. Second, we suggest there should be a restriction on the hourly rate of claimants’ solicitors so that they more closely resemble the rates charged by defendants’ solicitors. We are confident that there is now a will to tackle this question … We very much welcome the news that the Master of the Rolls has appointed Lord Justice Jackson to lead a fundamental review of civil costs, commencing in January 2009. We believe that there needs to be a review of the way clinical negligence cases are funded and we look forward to contributing to the review on behalf of members.”

NHS facing £700m negligence bill

In a time of global recession, some good news for personal injury lawyers and, in due course, costs draftsmen and other costs professionals in the announcement that clinical negligence payouts by the NHS in England are expected to rise by 80% next year.

The BBC reports that Steve Walker, chief executive of the NHS Litigation Authority, said part of the increase was prompted by a recent ruling in the Court of Appeal - the Thompstone judgment - which changes the way that payments for care are calculated.

He also said the move to more "no win no fee" cases had increased costs "dramatically" because it meant that solicitors were picking their cases carefully.

"The proportion of successful claims has gone up and is rising," he said.

"Legal practices are businesses and why not try and double your income for the same amount of work."