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Pearson Report

Volume 124: debated on Wednesday 16 December 1987

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Motion made, and Question proposed, That this House do now adjourn.— [Mr. Alan Howarth.]

11.26 pm

I am grateful to have this opportunity to argue the case for updating the recommendations in the Pearson report of 1978 on civil liability and compensation for personal injury.

Almost every week we read of somebody being awarded damages against a surgeon, doctor or anaesthetist because of some physical or mental disability that they have suffered through professional negligence. Sometimes the cause has been a failure to recognise the correct symptoms of what was wrong and in other cases the treatment has been seriously defective. In many of the cases, a disability has been created, too often of a kind that will last: as long as the person lives, with all the attendant difficulties for those who will look after them, including the mental anguish of seeing the person that one loves changed from a normal human being into an invalid requiring constant attention. Such a person is bound to impose a physical and psychological burden as a result of the unknown suffering endured by the victim.

I think that some actual cases will illustrate more effectively than any words of mine exactly what I am talking about. A woman gave birth to a brain-damaged baby after delays in treatment and after hospital staff failed to move her quickly enough from a private room to a delivery suite. The health authority involved paid half the £600,000 damages. A boy of nine who had swollen eyes, headaches and sickness was not properly examined and went blind. Two simple tests might have alerted the doctors, but they were not undertaken. The boy received nearly £120,000 in damages. A woman aged 49 had both breasts removed following a wrong diagnosis and she received £98,000. In June this year, Samir Aboul Hosin—described as a brilliant student—received £1,032,000 because he had a cyst removed from his brain when he was 18 and suffered brain damage during post-operative care. He is now said to be like a zombie and he is still only 23 years old.

Those are just four examples of recent cases of medical negligence. In them, as in so many other cases, two factors are common. First, the time that they take to be resolved is similar. On average, this kind of litigation takes five or six years. Secondly, they are similar with regard to the sums awarded in damages and to cover the legal costs. Those seeking damages have to be prepared to pay out huge sums to cover their legal expenses, and the defence organisations that protect the interests of doctors are gradually pushing up their subscriptions to meet the costs of the defence and to pay whatever award may be made in the event of negligence being proved.

In a recent case involving a young girl who suffered a brain injury, damages of £550,000, including costs, were awarded to the plaintiff. But the family was still left owing £65,000 for other expenses incurred. Suing in suspected cases of medical negligence can be undertaken only by those who are very well-off or on legal aid. For the rest of us, it is too expensive to contemplate, unless we are absolutely convinced that there has been professional negligence.

In consequence, many claims are never made, and no redress is provided for the would-be claimants, although they are the victims of medical accidents, if not negligence. It was for that reason more than any other that the British Medical Association set up its working party to consider an alternative compensation scheme to the current one. Of course, I agree that simply because someone is the victim of a medical accident does not mean that his misfortunes were the result of negligence, but should that automatically deprive him of compensation?

By definition, hospitals are places where sepsis and infection abound, but if someone contracts septicaemia, do we describe that as a natural hazard? By the same token, if someone has serious side effects from a drug, is that just bad luck and unavoidable? Whether it be septicaemia or a drug side effect, the probability is that the patient will be hospitalised, perhaps for weeks, as happened in my case.

That causes support difficulties for the family of the patient and, much more important, if the patient is self-employed, it could mean his or her business going bust. Yet no compensation is available and hospitals will seldom, if ever, admit to a mistake. To do so might make them liable, and the defence bodies urge their members to say nothing on the issue of legal liability.

What was described to me by a patient as a wall of silence exists between the victim and the hospital — a wall of silence that can be broken down only by lawyers and, occasionally, by a Member of Parliament. No wonder that the body which calls itself Action for Victims of Medical Accidents is handling an increasing number of cases. Most people simply want to know what happened to them. Action for Victims of Medical Accidents estimates that 60 per cent. of the cases brought to it fall into that category — not a search for financial compensation, but the desire for a simple explanation of what went wrong.

Some people believe, mistakenly, that the National Health Service Ombudsman has a role to play in this area. Sadly, he is not allowed to investigate clinical complaints. Therefore, either the victim goes to law, or he puts up with what has happened. Such a system lacks equity. Because of that, and because of the time that litigation takes and its expense, the rising cost of defence subscriptions and now the size of damage awards, many professional bodies are querying the findings of the 1978 Royal Commission, and especially the way in which it brushed aside the no-fault compensation schemes which existed in New Zealand and Sweden.

I admit that, at the time, such schemes were in their infancy, and perhaps critical scepticism was the proper reaction. But nine years on, considering the Swedish system especially, one is bound to ask whether something similar would not be worth considering here.

I have not taken the time of the House to advocate any system to replace the present regime. The National Health Service is different from the health services in New Zealand and in Sweden. I ask my right hon. and learned Friend the Attorney-General to recognise that my comments have the support of the British Medical Association, the Association of Community Health Councils of England and Wales, Action for Victims of Medical Accidents, the National Association of Health Authorities in England and Wales, the Medical Defence Union and may thousands of patients who have suffered medical accidents.

There are hon. Members on all sides of the House who believe, as I do, that a new look at Pearson, and the issues covered by his report, is now required—some form of fully comprehensive inquiry into the thorny and complex subject of medical compensation.

I recognise that a simple no-fault compensation scheme which contained no element of inquiry into the skill and ability of the medical staff involved would be defective. There must be a disciplinary body to judge professional standards, as happens with both the New Zealand and the Swedish schemes. By the same token, there are those who consider that the compensation offered them by whatever compensation authority might be set up must still retain the right to sue for negligence, although I suspect that the legal costs will be a considerable disincentive.

Perhaps I should strike a note of caution. I am told that one third of those who have sought financial compensation under the Swedish scheme have been refused. That only goes to show that a strict definition of what is a medical accident needs to be spelt out, and underlines the difficulty of defining those words.

If we leave matters where they are now, nobody doubts that subscriptions to medical defence bodies will increase, simply because more claims are being made, legal costs are rising and damage awards are increasing. As I have said, we have already broken through the £1 million barrier for damages. That in turn is likely to lead towards defensive medicine, as practised in the United States, simply because doctors will seek to protect themselves against the charge of negligence.

All this increased expenditure, including legal aid, falls on the general public. The doctor's subscriptions are part of his salary and are tax-deductable. The damages paid by health authorities come from public funds. The net result is that medical negligence is costing the taxpayer somewhere between £100 million and £150 million per annum, and the figure is rising.

I suggest that this matter is now reaching proportions where it is reasonable to suggest, as I am doing tonight, that a working party should be convened to reconsider the recommendations in the Pearson report. Nine years have elapsed since the report was published and, as I have shown, the situation has changed for the worse, both in the cost of medical negligence and in the fact that so many victims of medical accidents carry their scars to the grave, with no hope or possibility of financial compensation.

I do not believe that that should continue, and I ask my right hon. and learned Friend to consider setting up an inquiry with the following terms of reference: to consider the effectiveness of the present method for compensating those who are the victims of medical negligence and to make recommendations for improving the present system by introducing a form of compensation which would be available to all victims of medical accidents.

11.37 pm

I congratulate my hon. Friend the Member for Newbury (Mr. McNair-Wilson) on his success in the ballot and on addressing this very difficult and thorny subject, as he described it, which I know is of pressing interest to patients generally, whose interests my hon. Friend represents with such dedication, and to the medical profession as a whole. He referred properly and vividly to some poignant cases, the consequence of medical negligence. The fact that these cases exist is common ground.

The Pearson commission carefully considered the case for alternative methods of compensating those who suffer medical accidents. Two of its recommendations were to the effect that, with one exception, the basis of liability in tort for medical injuries should continue to be negligence and that a no-fault scheme for medical accidents should not be introduced. The report also said that the progress of the two different no-fault schemes in operation in Sweden and New Zealand, to which my hon. Friend has referred, should be studied and assessed.

These issues have been kept under review, as have the overseas schemes. It is notable that, at the time of the Pearson report, the view of the medical profession, as expressed by the British Medical Association, was firmly opposed to a no-fault scheme on the basis that such a scheme might undermine the independence of the profession, in particular, by obliging doctors and surgeons to defer to their employers, the health authorities. However, for the reasons which my hon. Friend has set out, there has been some shift in the view of the profession since then. It may be helpful first to summarise the arguments considered by the Pearson commission when it decided not to recommend the introduction of a no-fault system for medical accidents.

The commission looked first at the cost of a no-fault system. The costs involved are inherently difficult to assess precisely but, if the scale of the compensation envisaged were to be anything like that applicable when negligence is established under our present scheme, the costs would undoubtedly be high. The commission considered that the second main difficulty in the way of a scheme was, as my hon. Friend has recognised, how to establish causation—what has happened— because it is by no means always possible to identify the cause of an injury. There will frequently be difficulty in distinguishing a medical accident from the natural progression of a disease, or from a possible side effect of treatment. A no-fault scheme might seem to effect an improvement by achieving equal treatment of all parties suffering injury as a result of accident, but in a significant number of cases it would be seen to operate no less unfairly than a fault-based scheme in making a new distinction between accident cases and natural progression cases.

I noted that my hon. Friend said that the Swedish experience seemed to call for a precise definition of what is meant by medical accident. But these definitions inevitably give rise to comparison and distinction. I remember in the old cases of the Workmen's Compensation Acts, which were introduced in the 1920s precisely for this reason, seven or eight volumes of Butterworth's "Workmen's Compensation Law Reports" were filled mostly with cases that sought to distinguish different definitions of what was meant by "in the course of employment". So I take my hon. Friend's point, but I am afraid that definitions do not necessarily mean that one dispenses with subsequent litigation.

The Pearson commission noted in its review of foreign practice that the Swedish experience at that time was that one claim failed for every two that succeeded. High cost has always been an important factor in the operation of the New Zealand no-fault accident compensation scheme. That scheme, which came into force in 1974, provides rehabilitation and income-related benefits — financed largely by levies on employers, the self-employed and owners of motor cars — for disabilities resulting from accidents. It is not limited to medical injuries, but covers all accidents. The New Zealand Law Commission has recently referred to
"unexpected and considerable increases of costs in real terms".

The scheme applies only to disabilities that are the result of accident, yet the very definition of that term appears to have caused frequent litigation about its application in particular cases. Disabilities caused by accidents in New Zealand in the course of medical, surgical and dental procedures are expressly included within the definition of personal injury by accident, but compensation is generally refused when the disability results from the known risks of the particular medical procedure in question. To many patients, however, such disabilities must be seen to be no less the product of an accident.

The Swedish scheme is a voluntary one operated by a consortium of insurance companies under an agreement with the health care authorities and health professions, which pay the premiums. The scheme does not compensate for injuries which are the normal outcome of a disease. There is no compensation for injuries that are unavoidable complications of treatment selected for proper medical reasons, unless it can be shown that the patient could have been treated effectively in another way. Notably, the average level of awards is just over £2,000.

Perhaps I may now revert to the current position in the United Kingdom. My hon. Friend commented on the difficulties that a potential plaintiff can face in seeking to put forward a claim for compensation. He referred in particular to the problems of delay and expense. They are indeed real. As he will know, an investigation of what can be done about these matters has been undertaken. In February 1985, the civil justice review was set up to examine possible improvements in the machinery of civil justice and, in particular, to reduce delay, cost and complexity by means of reforms in jurisdiction, procedure and court administration. The review examined arrangements for five classes of civil business, including personal injuries, on which a consultation paper was issued early last year. A report on the review as a whole is due to be put before the Lord Chancellor in the early part of 1988.

My hon. Friend has also highlighted fears, which I am sure are shared by the British Medical Association, that the level of awards of damages in negligence claims following medical accidents may reach the enormous heights now apparently not regarded as unusual in the United States. In this context, he quoted a number of individual cases where particularly high awards were made. It is fair to make two points about this. First, when the effects of inflation are taken into account, the real value of such awards, for example in relation to a patient rendered quadraplaegic, may not have increased greatly in real terms over the last 20 years.

Secondly, the great majority of awards are at a relatively modest level. I noted the valuation of £100 million to £150 million that my hon. Friend said was the cost to the taxpayer under our present arrangements. We find that difficult to reconcile with the evidence available to us. It shows that the compensation arrangements here still have a relatively modest financial effect on the National Health Service. The total compensation paid by the health authorities in 1986–87 amounted to £9·3 million, not all of which related to accidents suffered by patients. Even taking into account ancillary costs, including legal aid about which my hon. Friend spoke, it seems that the total cost is probably under £50 million a year.

It is significant that in the United States juries determine the amount of damages awarded in personal injury cases, whereas here the award is almost invariably the reasoned decision of a single judge applying a tariff established by comparable cases. This fulfils the need for justice between one plaintiff and another. Moreover, the United States jury has power to award punitive damages, with the object of penalising the wrongdoer. The power to award punitive damages in this country is, by contrast, very restricted and I have never heard of its application in any personal injury case. It is also relevant that the contingency fee system in America encourages speculative actions and encourages higher awards. Therefore, it is possible to overstate the risk that awards for medical negligence damages in this country may reach the admittedly astronomical figures in the United States that we read about. I do not think that that risk is very high. I appreciate the formidable hurdle that litigation presents to an aggrieved patient. To use my hon. Friend's phrase, there can seem to be a wall of silence. However, I suggest that health authorities and doctors cannot be expected to admit liability without first consulting their legal advisers or, where appropriate, their insurance companies.

My hon. Friend will be aware that under the Act that he inspired in 1985, arrangements are being made to give statutory force to the present informal procedures for complaints about hospital treatment. He will also know about the voluntary system which operates in connection with complaints about strictly clinical matters. In any action for negligence of this kind, the court has power to order the disclosure of documents whether or not they are held by a party to the litigation. In the exercise of this power, the courts have recently emphasised that health authorities and medical practitioners ought to respond readily and promptly to any requests for disclosure, so that unnecessary expense and delay may be avoided. Whether the scope of that power ought to be extended is classic material for the civil justice review.

My hon. Friend said that he and a number of organisations believe that an update of the Pearson report is now required, but we do not believe that that is called for at present. The whole matter of compensation in connection with medical accidents is under review by the Department of Health and Social Security, and discussions are planned between officials and the BMA about a possible pilot scheme for no-fault compensation.

We have to balance the need for fair and sufficient cushioning, to use a neutral word, from the consequences of misfortune against the practicalities of providing money from whatever source. Since the Pearson commission reported, there have been significant improvements in the way in which cases that have to be brought to trial can be processed. The Lord Chancellor has in train the civil justice review, which is looking at the process of civil litigation, including litigation of this kind. The discussions to which I have referred are evidence of the Government's genuine concern about the matters to which my hon. Friend devoted his important speech. In wrestling with these complex issues of great importance to many people, the Government will be much assisted by my hon. Friend's speech and by his continuing and highly informed interest.

Question put and agreed to.

Adjourned accordingly at nine minutes to Twelve o'clock.