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Written on 9th February 2022 by Richard Money-Kyrle

The government has launched a consultation calling for comments on its plans to limit the legal fees (costs) that injured patients’ lawyers can recover from negligent healthcare organisations in successful claims where the patient’s compensation is less than £25,000. The proposed ‘fixed recoverable costs’ (FRC) scheme also proposes changes to the procedure for making low value medical negligence claims

The government believes the proposed scheme will:

  • speed up the procedure for making such claims;
  • keep lower value claims out of court;
  • reduce the overall cost.

Which claims will be affected by the government’s proposed changes?

The proposed FRC scheme will be mandatory for clinical negligence claims where:

  • the patient’s (or claimant’s) compensation is between £1,000 and £25,000;
  • the claim arises from NHS, not-for-profit or private healthcare;
  • the patient’s healthcare took place in England or Wales.

The proposed FRC scheme will not apply to:

  • cases where the claimant’s compensation exceeds £25,000;
  • specified exceptions, such as:
    • claims arising from stillbirth;
    • claims arising from neonatal (newborn baby) death;
  • specified cases involving additional complexity, such as:
    • where more than two liability experts are required;
    • where the patient’s claim is against more than one healthcare provider, so there are multiple defendants;
    •  where the defendant says the patient is out of time for making their claim and raises a ‘limitation defence’.

Claims arising from the fatal injury or death of a patient are included in the FRC scheme, as long as they meet the other criteria.

How will the procedure change for making a lower value clinical negligence claim under the FRC scheme? 

Key changes proposed by the FRC scheme consultation include:

  • claims to be assigned to a ‘light’ or ‘standard’ track depending on their complexity and whether the healthcare defendant accepts full or partial responsibility (liability) for the patient’s injury from the outset;
  • early disclosure of (only) the patient’s medical expert evidence and valuation of the claim;
  • deadlines for both parties to comply with all stages of the process, with sanctions against those who fail to comply;
  • two mandatory alternative dispute resolution stages to encourage agreement:
    • a ‘stocktake’ meeting between parties;
    • evaluation by an independent barrister, who gives an assessment of the strengths and weaknesses of the claim to both parties, and recommends whether or how much compensation should be paid.

If agreement cannot be reached within the FRC process, there is nothing to prevent patients from pursuing their claim through the courts. However, there are financial risks for those who reject a proposed settlement under the scheme and take the case to court.  

The proposed scheme does not affect the amount of compensation that a patient claimant can receive for their case, if successful.

Who will pay the injured patient’s legal costs under the new fixed recoverable costs procedure?

Fixed recoverable costs will be mandatory for all clinical negligence claims which fall within the scheme. This means that only a limited, fixed amount of the patient’s legal fees (costs) for the work their lawyer has done to investigate and pursue their claim, and recover their compensation, can be reclaimed from the healthcare defendant after the patient has successfully settled their claim.

The proposed scheme will only affect the amount of legal costs that the patient can recover from the NHS or healthcare provider following a successful claim. It does not set a limit on the fee that is arranged between the claimant (patient) and their own lawyer, such as under a conditional fee agreement (CFA or no win no fee). Any outstanding fees (costs) over and above the fixed amount of costs that can be recovered from the losing defendant will instead be paid by the claimant rather than the healthcare defendant at the end of the claim. 

The legal costs that can be recovered from the healthcare defendant at the end of a successful claim are fixed in advance and set out by the scheme.

In some cases the healthcare defendant’s contribution to the injured patient claimant’s legal costs will be limited to a maximum of £1,500. An additional sum equal to 10% of the compensation payment must also be paid where either:

  • the patient’s healthcare was criticised:
    •  by a coroner;
    •  in an NHS trust’s Serious Incident Report;
  • an admission that a negligent mistake has been made (whether or not it caused the injury);
  • or the parties agree that no expert evidence is needed to prove breach of duty (negligence) or causation of injury.

In other cases, the proposed FRC scheme limits the healthcare defendant’s contribution to the patient claimant’s legal costs to a maximum of £6,000 plus an amount equal to 20% of the compensation settlement.

In some specified cases, additional fixed costs can be recovered for additional work that is needed to protect the interests of:

  • an injured patient or claimant who is a child;
  • an injured patient or claimant who lacks mental capacity;
  • in FRC claims involving fatal injury, where legal representation is needed at a coroner’s inquest for the purposes of the claim.

What happens next?

The consultation will close at 11:45pm on 24 April 2022.

The government says that it will consider the responses to the consultation and publish a full response. The proposals for any FRC scheme that is introduced will then need to be approved by the Civil Procedure Rule Committee before being implemented via a statutory instrument.

The scheme will then be reviewed not later than five years after implementation to consider what effect it has had. The government anticipates that at that time it will also consider whether the upper limit of the claim value should be increased from £25,000.

More details, including the consultation questions and a link or email address to respond to the consultation, can be found on the government website.

If you, or someone in your family, has suffered serious injury or disability from medical negligence and you would like to find out more about making a claim, you can talk to one of our solicitors, free and confidentially, by contacting us here.