I beg to move,
That this House has considered the Government’s proposals on fixed recoverable costs in clinical negligence claims.
Thank you, Mr Nuttall, for presiding over this very short debate. I thank Mr Speaker for granting it and my hon. Friend the Minister for being here to respond on behalf of the Government.
I should make it clear at the outset that, although I am a barrister in private practice, my work does not include clinical negligence cases, so I have no personal interest in this subject. I have, however, been approached by a number of solicitors from Leicestershire, the Leicestershire Law Society and the Law Society of England and Wales. They are concerned that the Government’s consultation on the fixed fee regime, which is being conducted by the Department of Health, has been delayed, although I understand that the Government intend to introduce a fixed recoverable cost regime in October. Those concerns are shared by a number of other solicitors’ firms, including Irwin Mitchell and Slater and Gordon, and organisations such as the Association of Personal Injury Lawyers, the Society of Clinical Injury Lawyers and the Bar Council. I am grateful to all of them for the assistance they have given me in preparing for this short debate.
Let me begin by placing my concerns in context. On the face of it, the Secretary of State’s statement, which has been trailed in the press—apparently, he is going to make a statement in the House of Commons this afternoon—confuses punishment, which is dealt with under criminal law, and civil law remedies, but no doubt he will make himself clearer this afternoon. Perhaps my hon. Friend the Minister can clarify that issue briefly this morning.
I accept that the Government do not have a bottomless purse. Taxpayers’ money is needed to pay for a huge range of public services, all of which compete for scarce resources at a time when the Chancellor is trying to balance the books and decrease public expenditure.
Will the right hon. and learned Gentleman give way?
I will not give way.
That this debate takes place only a week before the Budget underlies that point. I further accept that the vast majority of patients who visit a GP, an NHS surgery or a hospital leave satisfied with their treatment and the outcome, but very occasionally something goes wrong. In just over 3% of those cases an error caused by a negligent decision or act of omission by a clinician leads to a claim being made by the injured person against the NHS. Such cases can include, for example, birth injuries or misdiagnosed or mistreated illnesses. Of course, those are not deliberate actions by ill-motivated doctors or nurses, but negligent ones that lead to adverse consequences for the patient.
What does 3% mean numerically? In 2011-12, the NHS reported just under 420,000 so-called “adverse incidents causing harm”, of which 13,500, or just over 3.2%, resulted in a clinical negligence claim. In the following year, there were just over 458,000 such incidents and 16,000 claims, or about 3.5%. In 2013-14, there were just over 470,000 incidents and just under 18,500 claims, or 3.9%. In the great scheme of things, those numbers are small, but they represent permanently damaged or shortened lives, pain, suffering, heartache and anguish.
Of course, they also represent monetary expense to the claimant and the NHS. We should therefore aim to ensure justice and proper compensation for the claimant who has been injured, and protect the taxpayer from excessive and unnecessary expense in legal and medical experts’ fees.
Will the right hon. and learned Gentleman give way?
I regret that I cannot; this is a half-hour debate, and I am afraid we are rather pushed for time.
It is uncontroversial to state—and the common law expects this—that damages should, as far as they can, put the injured party back where they were before the incident. We need a system that does not prevent the bringing of justified claims and encourages excellence and proportionality in the conduct of each claim, as well as in the conduct of the defence. An efficiently and expertly brought claim saves money, as it leads to the real issues being considered within a suitable timeframe. It allows the defendant to focus more quickly on what they need to do to satisfy the claim and not waste time and money on irrelevant or hopeless points.
Any changes that the Government intend to impose should not be retrospective—that is a basic rule of fairness —and must be even-handed. The Treasury must be an umpire and not a partisan ally of the Department of Health, because in the long run a poor set of reforms will lead to greater expense, not less, and a lessening of public trust in the NHS and the Department. Given that the Department of Health is managing the consultation and is the most common defendant in clinical negligence claims, it is difficult—despite, I hope, the construction of very high Chinese walls—to think of this as a wholly disinterested exercise.
It is easy to say—although it is not so easy to accomplish this—that the best way to reduce the number of clinical negligence claims against the NHS is to reduce the incidence of medical negligence. That is no doubt a statement of the blindingly obvious, but it may occasionally get forgotten as the Government look for ways to cut expenditure. Let us start by improving the training and decision making of those in the NHS who are statistically most likely to do things that lead to clinical negligence claims.
Let us also remember that the Legal Aid, Sentencing and Punishment of Offenders Act 2012 automatically cut the costs and expenses paid out by the NHS Litigation Authority by about a third, and that for claims worth less than £25,000 those savings come to 39% of the costs budget, or £71 million a year. In the NHSLA’s annual report of 2014-15, the chairman asserts that more than a third of the NHSLA’s spending was received by the legal profession, and most was paid to claimant lawyers. In fact, the report shows that the NHSLA’s operating costs amounted to £2.64 billion, of which £291.9 million, or 11%, was paid to claimant lawyers and £103.2 million, or 4%, to defence lawyers.
The report’s figures suggest that 15% of the LA’s spending is paid to lawyers, but there is no breakdown of what that number includes. The report indicates the LA’s net operating costs reduced from £3.373 billion to £2.641 billion between 2013-14 and 2014-15—a reduction of £732 million. It also says that claims reported to the LA reduced from 11,945 in 2013-14 to 11,497 in 2014-15—a reduction of 3.7%. The amounts paid out in damages reduced from £840.7 million in 2013-14 to £774.4 million in 2014-15—a reduction of 7.9%.The NHS has therefore achieved significant reductions in expenditure. The NHSLA also reports an increase in sums paid to claimant lawyers for costs and disbursements from £259 million to £292 million between 2013-14 and 2014-15. The average cost per case increased from £16,852 to £17,735—an increase of 5.2%.
There is inadequate analysis of those figures, and the report is, to that extent, misleading. The NHSLA claims to have
“saved over £1.2 billion…in rejecting claims which had no merit.”
However, as claims without merit always fail, those savings are illusory. It cannot claim to have saved money it would never have spent. The authority also claims that £38.6 million was saved by taking a significant number of cases to trial, but it does not say how much was spent unsuccessfully contesting cases at trial or settling cases soon before trial.
The NHSLA refers to the levels of costs recovered by claimant lawyers without distinguishing between costs and expenses. It compares the level of costs incurred by different sides without noting that the burden of proof requires claimants to undertake much more work than defendants. APIL says that nearly half of what the NHSLA says it pays out in legal costs to claimants’ lawyers are accounted for by success fees on conditional fee agreements, after the event insurance premiums, court fees and expert witnesses’ fees. Much of that could be saved if the NHSLA were better at its job of settling the claims it ought to realise it will lose on liability from or close to the outset.
That said, not all medical negligence claims are straightforward, but proving what went wrong is not made easier for a claimant’s lawyer when the NHS holds all the information and is reluctant to disclose it. On far too many occasions, cases that could have been settled more quickly, cheaply and satisfactorily are not, because the NHSLA withholds information, does not respond in good time to requests for information, or simply fails to apply its collective mind to the best way of dealing with the complaint. I have lost count of the number of times that I, as a constituency Member of Parliament, have corresponded with a hospital, insurance company or some large institution, private or public, that, when faced with a complaint, has buried its head in the sand and hoped that it will go away.
Most complainants just want someone to take responsibility and say sorry, and are not after money or revenge. That applies to the bereaved parents of stillborn babies as much as it does to the adult children of an elderly patient who died after a fall from a hospital bed, or who lay for days in agony because of untreated bed sores. The defensive failure to apologise often causes more heartache than the negligence itself and causes claimants to believe that they have to sue to get justice.
In addition, the NHSLA too often engages in unproductive trench warfare: it must not be seen to be giving ground, so the order goes out: “Deny, defend, delay!” Cases that could have been resolved months and sometimes years earlier end up being settled at the door of the court, or lost after a trial, by which time advocates’ brief fees have to be added to all the other costs that have piled up unnecessarily since the complaint was first raised. If ever there was a need for a patient to heal himself, it is the NHSLA in its refusal to free itself from the indefensible, or to see the wood for the trees. Rather than too often denying, defending and delaying in the wrong cases, it should assess, admit and apologise in the right cases.
An example of that is in the failure to look for and to release medical records. Requests for records should be met under the Data Protection Act 1998 within 40 days, and under Government guidelines for healthcare organisations within 21 days. Far too often both deadlines are missed, and not by a whisker, but by a country mile. It can often take more than six months for claimant lawyers to get patients’ records from GPs and hospitals and, with a limitation period of three years to bring a claim, pressure mounts to issue proceedings to protect the claim. It is not unheard of for long-delayed medical records to show that the claim is unwinnable, so it is dropped—but why not send out the records within a month and save the time, the expense and the anguish?
The NHS is a hydra-headed organisation and, when dealing with medical negligence claims, that can lead not to the proper use of decision-making powers at the most local level, but to procrastination, duplication and more expense. Some NHS trusts have in-house legal departments and when they receive a claim pass it directly to the NHSLA; some hold on to them and pass them on much later. My informants from the legal profession tell me that trusts’ legal teams are far less settlement-minded and tend to use every point, good, bad and indifferent, to string the claimant along. If a case gets towards trial, the NHSLA instructs outside lawyers. Why not make it a matter of policy for all claims to be handed straight over to the NHSLA, and thus minimise, even if not abolish, delay and unnecessary costs?
Finally, I want to urge the Government to reconsider their proposal that all clinical negligence cases up to a value of £250,000 should be low-value claims. First, in any view, £0.25 million is not a low-value claim either to the claimant or to the taxpayer, not least when one considers how many there are every year.
Secondly, to take just one example, hundreds of babies are left brain-damaged every year because the NHS has treated them negligently either before or after birth and, sadly, some of them die soon after birth. A claim brought by the parents of a child who has died aged a few hours, days or weeks will not of itself lead to a large award of damages, but the evidential route to determining where liability lies for the acts or omissions that led to that premature death can be highly complex in investigation and assessment. The same legal costs may be incurred in proving a claim, whether it is of low or of high value.
For instance, in a case of delayed cancer diagnosis, the same expert evidence may be required where a patient’s life expectancy has been reduced by two years and the award is £30,000, or where life expectancy is reduced by 50 years and the case is worth £500,000. Those worst affected will be the most vulnerable—the elderly, those on low income and people with disabilities.
On 13 January, in answer to my written questions Nos 21040 and 21037, the Minister accepted, unsurprisingly, that there is no exact correlation between the value and complexity of clinical negligence claims, and it must therefore follow that to impose an artificial limit on the amount of costs recoverable by the claimant based only on the quantum of damages could lead to injustice, especially when the NHSLA will not be equally constrained.
Already claimant law firms reject 90% of inquiries in this field and the proposed fixed-fee regime for cases of up to £250,000 will simply dissuade firms from assisting even more claimants. As one experienced Queen’s bench master who specialises in such cases recently said, further research is
“essential in order properly to understand the impact on access to justice of the existing system of funding before implementing any further changes.”
A fixed-costs system for claims under £250,000 would affect 95% of cases and make many meritorious claims unviable for patients, undermining the legal and the medical systems. That would not be in the interests of justice, of medicine, of the economy or of the country, and we need to think again. The Minister is a thoughtful man, and I am sure he will want to give a thoughtful response, today and subsequently.
This is a fascinating matter, which deserves a great deal of debate. We could discuss this interesting subject for many hours. I am grateful to my right hon. and learned Friend the Member for Harborough (Sir Edward Garnier) for condensing a complicated issue into a 15-minute, eloquent explanation of the problems that face us.
In addition to the reading that my right hon. and learned Friend has already done, I point him in the direction of the MBRRACE-UK—Mothers and Babies: Reducing Risk through Audits and Confidential Enquiries across the UK—report into the quality of investigations into stillbirths and neonatal injuries and deaths in the NHS, which was published at the end of last year. Although it charts a significant improvement in the reduction of stillbirths and neonatal deaths over the past 20 years due to the advancement of science, it draws one very depressing conclusion, which is that the quality of investigations has not improved since the 1990s.
I admit immediately that there is not yet any clear, scientifically proved correlation between that and the fact that litigation costs have increased, but I hope that my right hon. and learned Friend will accept my initial submission, which is that there is not the evidence for one of his claims, that somehow the increase in litigation automatically leads to an improvement in investigation and, therefore, to an improvement in patient safety. I therefore suggest that one of the statements that he made in his very careful speech is not a full reflection of the truth that we are seeking to uncover.
My right hon. and learned Friend said that we should aim to achieve proper justice and proper compensation for the claimant, and that that is the endpoint of litigation —but it is only a partial endpoint. The first thing that we are trying to achieve is an understanding of what went wrong to ensure that that is immediately transmitted back into the service, so that we prevent such a clinical catastrophe from happening to another individual or family. That is exactly where the existing system does not work, because it militates against learning early in the litigation process. In many instances, it provides a definitive account only at the point of judgment. That is what we are seeking to change through our proposed reform.
I am grateful to the Minister for giving way, and I congratulate the right hon. and learned Member for Harborough (Sir Edward Garnier) on securing the debate. I also declare that I am a non-practising door tenant at Civitas Law in Cardiff.
I accept the Minister’s point about the quality of investigation. Will he also agree that access to justice is itself crucial, particularly given that the Lord Chief Justice, Lord Thomas of Cwmgiedd, recently said that access to justice is now “unaffordable to most” and available only to the very richest?
I will turn to access to justice. I do not entirely accept the hon. Gentleman’s interpretation of the judge’s words.
In our proposed reforms, I intend to change the balance for the NHS Litigation Authority and for claimant lawyers to ensure that we get to a single version of the truth as early in the process as possible. I accept in its entirety my right hon. and learned Friend’s interpretation of the NHSLA’s performance in past years. I do so on the basis that many claimants have been immensely frustrated—as have the clinicians involved—by the length of time that trusts and the LA have had to respond to claims, the length of time it often takes to reach a resolution and the fact that there is often too much defence, delay and prevarication. At the same time, I have full confidence in the NHSLA’s current management, because I have seen a real determination to get to grips with the problems it inherited and change the authority into something far more fit for purpose.
I accept my right hon. and learned Friend’s contention that we need to change what happens with the NHSLA, but I posit that the existing costs regime encourages some claimant lawyers to stack costs in the early stage of a claim process rather than get to what we need to do: to establish a version of the truth agreed between all parties. I am not arguing that that is a deliberate and malicious intention, but that is how the system is constructed at the moment. Therefore, in attempting to reform how costs are settled between the NHSLA and claimants, we want to incentivise learning right at the beginning of the process, to ensure that it is as rapid as possible and that, if claimants have a fair claim, they receive justice and compensation as quickly as possible. Our interests are therefore entirely aligned.
That is why I say to claimant lawyers—I have said this privately to them on several occasions—that this is a genuine consultation. We are seeking to find out how best to reform a system that we all accept is not right. I therefore warn them against peremptory lobbying of Members of Parliament about a scheme that has not yet been determined. This is a genuine consultation, in which we will accept all their views, but they cannot—I hope they will not—proceed on a basis that could lay them open to accusations of pleading for special interests rather than trying to contribute to the consultation.
The right hon. and learned Member for Harborough (Sir Edward Garnier) said that law firms currently reject 90% of cases brought to them because the burden of proof is high. I therefore do not think that we should portray this as a field of many frivolous claims. With that degree of rejection by law firms as background, will the Minister tell the House how the Government came to their figure for estimated savings for the new regime of £80 million? Where will those savings come from?
I hope that I in no way suggested that any of the claims brought forward were frivolous. I am saying that the way in which the current system is constructed loads costs at the beginning, and that does not help get us to a fair and equitable solution as quickly as possible. I am merely positing, but I believe there is fault on both sides. It is not necessarily the fault of either organisation; it is the fault of the system as a whole, which does not encourage good behaviours. The result is that we are not extracting learning as quickly as possible from litigation; we are not using claims, when unfortunately they are brought, to ensure that we improve medical practice; and, frankly, we are not using the early stage of complaints sufficiently well to ensure that claims are not brought.
I entirely agree with my right hon. and learned Friend that almost all complainants are not after a financial reward; they just want someone to say sorry and to accept responsibility for what happened. If we can achieve that far quicker in a learning culture, we will do something remarkable, not just for them, but for the many people who will follow. In answer to the right hon. Member for Wolverhampton South East (Mr McFadden), the estimate of savings proposed in the initial consultation document was part of the spending review round, and it was done through the usual modelling processes employed by the Treasury and the NHSLA, which understands the value of claims coming through.
My right hon. and learned Friend asked about the £250,000 limit. That limit was not arbitrary, but drawn from the original intentions of Lord Justice Jackson’s review on civil litigation costs in 2010, with which I know he is well acquainted. In that review, Lord Justice Jackson pressed for fixed recoverable costs in the lower reaches of the multi-track up to £250,000. That was in relation to personal injury claims, but, in trying to draw a line somewhere, we felt that that was an appropriate place, given his recommendation to do so. That is, however, subject to consultation. We want to hear the full range of views about where the limit should be placed. My right hon. and learned Friend’s contribution will be an important part of that consultation, and I and officials will take note of it.
My right hon. and learned Friend spoke of the Chinese walls and why the Department of Health is bringing forward this review. He is well aware of the usual practice that Departments bring forward proposals that relate to their areas of responsibility. The Ministry of Justice did so in previous reforms in which it had a financial interest, just as the Department of Health is doing here. I hope that, in our open approach, we will be able to explain that our primary concern is around changing the culture of the NHS and making sure that we are driving down claims for good reasons—that there are fewer of them because we are improving clinical practice—rather than just trying to deny people access to justice, which is the opposite of one of the intentions of the review.
The hon. Member for Torfaen (Nick Thomas-Symonds) is entirely right to say that we should ensure that we make justice as open as possible. The litmus test of the reform will be that, if people feel that, despite everything we are doing to make the NHS a better organisation—listening to complaints, learning from mistakes and providing restitution early—they still wish to bring forward a claim, it will be easy to do and no unreasonable barriers will be placed in their way.
If a person has a claim as a result of a serious injury, but they cannot get legal representation, that person is still severely injured and the costs will still fall back on the state.
I am well aware of that, and that is why we need to ensure that, at the end, the reform produces good effects rather than deleterious ones. I am aware of the concerns of the hon. Lady and many hon. Members, but I ask her to be open to what the Government are trying to do and to feed in her suggestions for how we can make the system better, because clearly at the moment, as I have tried to explain, it is not working in the interests of patients in the NHS. That is why we so badly need reform of the clinical negligence system.
Finally, my right hon. and learned Friend spoke about the speech that the Secretary of State is due to give—he will brief the House in due course—and wondered whether punishment was being confused with civil law remedies. We must all understand—many in the clinical negligence community have not quite grasped this—that a revolution is going on in medicine at the moment, learning from other sectors such as air accident investigation, that appreciates that one can have learning and lessons learnt in an organisation only if one provides safety for clinicians, for example, to speak openly when something has gone wrong. Sometimes we need to provide context around such discussions to make them feel safe. That has been achieved for air accident investigations and we want to do something similar for the NHS, so the Secretary of State will make more of that plain to the House in due course.
None of that is to change the basic freedom of people to find remedies in law. As we develop this exciting area of medicine in the next few years, I hope that the interplay between those two will mean reductions in deaths, accidents and patient safety problems in the NHS by tens of thousands and then hundreds of thousands in the years to come. That will possibly be one of the biggest factors in reducing mortality in the NHS since its foundation more than half a century ago.
Question put and agreed to.