Kerry Underwood

CLINICAL NEGLIGENCE DEPARTMENT OF HEALTH CONSULTATION


This is all dealt with in my new book – Personal Injury Small Claims, Portals and Fixed Costs which will be out in March. This is three volumes and over 1,300 pages. You can pre-order your copy at a discounted price of £68 including P&P (normal price £80 including P&P) by 6 March.

To pre-order your copy, contact Kerry Underwood on 01442 430 900 or email kerry.underwood@lawabroad.co.uk.

This is also all dealt with in my Personal Injury Reforms course this May, which can booked here – early bird discount for booking and paying by 6 March.

On 30 January 2017 the Department of Health published its consultation paper:

Introducing Fixed Recoverable Costs in Lower Value Clinical Negligence Claims

 

The consultation closes on 1 May 2017.

It covers England and Wales only.

It covers all clinical negligence claims, for example those against private healthcare providers and not for profit organisations, and not just the National Health Service.

This is separate from Lord Justice Jackson’s review of the extension of Fixed Recoverable Costs; LJ Jackson’s report is due out by 31 July 2017.

The Department of Health’s consultation covers clinical negligence claims where the damages are between the current small claims limit of £1,000.00 and the existing Fixed Recoverable Costs upper limit of £25,000.00, which is also the general fast-track upper limit.

However, the scheme would cover claims worth £25,000.00 or less, even if allocated to the multi-track, which many such clinical negligence claims are.

Indeed the consultation paper states that “the vast majority of clinical negligence claims within the £1,000.00 to £5,000.00 damages tranche are allocated to the multi-track.”

At the time of writing, no final decision has been made by the Government as to whether the personal injury small claims limit will go up, and if so what to, and whether or not it will cover all personal injury claims, or only certain categories.

However, given that the vast majority of even £1,000.00 to £5,000.00 clinical negligence claims are allocated to the multi-track, any change to the small claims limit will make little difference in relation to clinical negligence claims.

Any claim which is below the normal small claims track limit, but which is allocated to the fast-track or the multi-track, is cost bearing in the usual way.

The consultation paper states that the £1,000.00 to £25,000.00 band covers around 60% of claims against the National Health Service, based on how much the claim actually settles for, rather than the value of the claim.

21% of claims settled for between £1,000.00 and £5,000.00 (paragraph 3.10).

As the consultation itself makes clear, it does not “affect the sum a lawyer charges a client, which is a matter of private agreement. Nor does it affect the amount of compensation (damages) awarded to the claimant. It solely affects the legal costs that a claimant can recover from the defendant following a successful claim.” (Paragraph 1.2).

Table 4 of the consultation paper sets out the settlement value and number of claims settled in 2015/16.

“Table 4: Value of clinical negligence claims closed against the NHS in England in 2015/16

Damages Tranche £

(note 1)

No. of claims % of total claims % of claims settled for damages
Nil (i.e. settled for no damages) 4,983 46.2% n/a
£1 – £1,000 184 1.7% 3.2%
£1,001 – £5,000 1,203 11.2% 20.8%
£5,001 – £25,000 2,272 21.1% 39.2%
£25,001 – £50,000 866 8.0% 14.9%
£50,001 – £100,000 556 5.2% 9.6%
£100,001 – £150,000 202 1.9% 3.5%
£150,001 – £200,000 129 1.2% 2.2%
£200,001 – £250,000 67 0.6% 1.2%
£250,000 + 316 2.9% 5.5%
Total 10,778

Note 1: the damages tranches includes claims allocated to the small claims track as it is not possible to breakdown the number of claims by track.

Source: NHS Litigation Authority”

 

The paper puts forward two alternative policies for the key date as to when the scheme will apply:

  • Any case in which the Letter of Claim is sent before the implementation date is subject to the existing regime of open costs, with the new Fixed Recoverable Costs scheme applying where the Letter of Claim is submitted on or after the implementation date, but with a deadline for settlement or issue, failing of which the scheme will apply even where the Letter of Claim was sent prior to the implementation date.
  • Any case where the cause of action arises before the implementation date is excluded from the new regime and the old, standard costs would apply. The Government prefers the first option.

The options

 

The consultation paper puts forward four options.

  • A flat fee, determined by the stage that the case has reached, with the claim or settlement value playing no part in determining the fee.
  • A core fee, depending on the stage reached, plus a percentage of damages, that is a system based on the current scheme for road traffic, employers’ liability and public liability claims.
  • Option 1 – a flat fee – but with a small reduction for early admission of liability; the reduction ranges from 10% to 15% depending upon when liability is admitted.
  • A cost analysis approach – this appears to be based on current open costs but with the new figure being arrived at by a combination of a core fee plus a percentage of damages ranging from 19% pre-issue to 47% post-listing.

I do not pretend to understand the logic of option 4, and I am not sure that the authors do either as the figures that they have put forward in table 7 – see below – do not add up.

The figures

 

Options 1, 2 and 3

 

Table 6: Illustrative FRC Rates for Options 1, 2 and 3.

 

Stage Option 1:

Staged Flat Fee Arrangement

Option 2:

Staged Flat Fee Arrangement Plus % of damages

Option 3:

Early Admission of Liability Arrangement

Pre-issue £3,000 £1,500 + 10% of damages:

minimum of £1,600

maximum of £4,000

£3,000 less 10% = £2,700
Post-issue/pre-allocation £3,900 £3,000 + 10% of damages:

minimum of £3,100

maximum of £5,500

£3,900 less 15% = £3,315
Post-allocation/pre-listing £5,650 £6,000 + 10% of damages:

minimum of £6,100

maximum of £8,500

£5,650 less 10% = £5,085
Post-listing £7,150 £6,500 + 10% of damages:

minimum of £6,600 or £7,000

maximum of £9,000

£7,150 less 10% = £6,435
Notes: (1) Factual Witness Costs, Trial Fees are in addition to the figures. Counsel costs are included with the figures but exclude trial advocacy. London weighting would be in addition. Recoverable trial costs to be in accordance with Civil Procedure Rule (CPR) 45.38 (Table 9). Excludes VAT and interest. (2) In option 2, the maximum rate is damages of £25,000 respectively. Two options are given for the minimum rate relating to damages awarded of £1,001 and £5,001. The rate recovered will depend on the amount of damages awarded.

 

Option 4

 

Table 7: Illustrative FRC Rates for Option 4.

 

Stage Illustrative Figures
Rate Minimum: damages are £1,001 Maximum : damages are £25,000
Pre-issue £3,080 + 19% of damages £3,270 £7,830
Post-issue/pre-allocation £5,920 + 34% of damages £6,260 £14,420
Post-allocation/pre-listing £11,560 + 38% of damages £11,880 £21,000
Post-listing £10,320 + 47% of damages £11,970 £22,070

 

The figures in table 7, giving illustrative rates for option 4, appear to be incorrect.
For example post-allocation/pre-listing minimum damages, that is £1,001.00, produces a fixed fee, by my calculations, of £11,940.10, that is £11,560.00 plus £380.00, being 38% of the damages as follows:

Core fee 38% of £1,001.00 Total
£11,560.00 £380.38 £11,940.38

However the table shows a figure of £11,880.00.

For post-listing in the same claim I calculate the figure to be £10,790.10 as follows:

Core fee 47% of damages Total
£10,320.00 £470.47 £10,790.47

However the table shows a figure of £11,970.00.

Advocacy

 

As with the existing personal injury fixed costs scheme, there is no separate provision for counsel’s fees for an advice or conference or whatever, but there is an advocacy fee determined by the value of the award.

The figures are the existing ones for non-personal injury cases, as set out in CPR 45.38 and these are lower than the personal injury fixed advocacy costs in CPR 45.29.

Thus the advocacy fee for a clinical negligence trial will be less than for a road traffic accident trial.

This anomaly is even more marked if the clinical negligence claim has been allocated to the multi-track, as we know most such cases are.

Thus, for example, a clinical negligence trial in the multi-track for say £20,000.00 will attract a fee of £1,650.00, whereas a road traffic accident fast-track trial involving £20,000.00 would attract a fee of £1,705.00.

Note also that if the road traffic accident matter is allocated to the multi-track then the advocacy fees are not fixed at all following the decision of the Court of Appeal in Qader & Others v Esure Ltd & Khan v McGee [2016] EWCA Civ 1109, 16 November 2016, and now confirmed by the Civil Procedure (Amendment) Rules 2017, Statutory Instruments 2017 No. 95 (L. 1), note 8(1), effective 6 April 2017.

 

The proposed trial cost figures are in table 8.

Fee for counsel if matter settles

I suggest:

25% of the fixed advocacy fee if the matter settles between 21 days and 42 days before trial.

50% of the fee if it settles between seven days and 21 days before trial.

75% of the fee if it settles within seven days of trial.

That is fair to counsel and encourages relatively early instruction of counsel by solicitors, and if there is to be settlement then this encourages settlement rather earlier than at the doors of the court.

Table 8: Amount of fast track trial costs which the court may award

Damages Value Trial Costs
No more than £3,000 £485
More than 3,000 but not more than £10,000 £690
More than £10,000 but not more than £15,000 £1,035
For proceedings issued on or after 06/04/09, more than £15,000 £1,650

 

Experts

 

A maximum fee of £1,200.00 for experts for any one party is proposed.

Thus a claimant will be allowed to incur £1,200.00 in expert fees and so would a defendant, giving £2,400.00 in all.

 

Recoverable After-the-Event insurance premium

 

There is no reference to the issue of After-the-Event insurance premiums, which currently remain recoverable in relation to the cost of expert reports on liability and causation.

If a fixed costs scheme, including capped expert fees comes in, then recoverability is bound to be abolished.

Multiple claimants

 

There will be one fee for each claimant, as per the current Fixed Recoverable Costs scheme.

Escape Clause

 

The existing test of exceptional circumstances and obtaining at least 20% more than fixed costs is proposed.

Note that it will need to be exceptional circumstances in the context of a clinical negligence case.

This is clearly to avoid claimant solicitors arguing that any clinical negligence case involves exceptional circumstances as compared with other personal injury cases.

 

London weighting

 

The existing 12.5% London weighting allowance would continue.

VAT

 

VAT is added to all the figures.

Children

 

There will be an additional, unspecified, fee for costs and fees relating to infant approval hearings.

As the courts generally allow no deduction from a child’s damages I am now of the view that any case involving a child should attract a 30% increase in Fixed Recoverable Costs. In a sense this is allowing recoverability of what would be a success fee but I think that is justifiable given that the defendant is a state body and the state’s duty is to protect children and the state has taken the view that there should be no deduction from a child’s damages.

Part 36

I also think that there should be a fixed recoverable counsel or specialist solicitors’ fee for advising on a Part 36 offer as that is likely to lead to earlier settlement.

On no particularly scientific basis I was think of 2.5% of the value of the offer with a minimum fee of £350.00.

That would encourage solicitors to seek advice and hopefully encourage earlier settlement.

It would also discourage defendants from making several offers as they would be paying each time and therefore one would hope that they will make a more thought out and attractive offer early on.

I also think that counsel should get a percentage of the fee for advocacy if the matter was settled and my initial thoughts on that are 25% of the fee is the matter settles up to 42 days before trial, and 50% of the fee if it settles up to 21 days before trial and 75% of the fee if it settles up to seven days before trial.

If that encourages solicitors to instruct counsel earlier rather than later then that is surely a good thing.

Defence costs

 

Qualified One-Way Costs Shifting will apply as now and defence costs will be capped on the same basis as in the current fixed costs scheme as set out in CPR 45.29F.

Defence costs can arise if Qualified One-Way Costs Shifting is dis-applied, or if the claimant fails to beat, or accepts late, a defendant’s Part 36 offer.

A draft Pre-Action Protocol and draft Civil Procedure Rules and draft amendments to Part 36 all appear at Annex D of the consultation paper.

The draft Pre-Action Protocol for resolution of fixed cost clinical disputes appears at chapter 54.

The proposed new CPR 36.20 to CPR 36.21A, including the costs consequences of Part 36 in relation to the clinical negligence fixed costs scheme, appears at chapter 55.

A new draft CPR 45 section VIII: Fixed Recoverable Costs in Clinical Disputes – appears at chapter 56.

 

 

 

 

 

 

 

 

Some examples

 

Here I look at some examples of cases settled at different stages for different values under the different proposed schemes.

Option 3 in the Department of Health’s Consultation Paper simply involves a 10% to 15% reduction from the figures in option 1 for an admission of liability.

The proposed reduction is 10% for all stages, except post-issue/pre-allocation, where the proposed reduction is 15%.

I do not include option 3 in the examples set out below as they are complicated enough already. You can work out yourselves the consequences of a 10% or 15% reduction.

For the same reason neither have I prepared separate calculations for the 12.5% London uplift, and it is about time that that was scrapped anyway.

Nor do I include advocacy fees which are fixed in all cases as considered in detail above.

Consequently the tables consist of the figures for option 1, option 2, option 4 and also my proposals submitted to Lord Justice Jackson’s review, and which were considered at the seminar in Manchester on 7 February 2017.

It should be noted that the Department of Health’s proposed fixed costs figures cover fast-track and multi-track cases, with the same figure being used whichever matter the track is allocated to.

My proposals have a significantly higher figure for multi-track work.

It seems to me to be self-evident that if a judge decides that the matter is of sufficient complexity to warrant being in the multi-track, then a higher fee should be paid.

Given that the Department of Health itself states that the vast majority of clinical negligence cases, even in the lowest £1,000.00 to £5,000.00 bracket, is allocated to the multi-track, the true comparison is with my multi-track figures, rather than my fast-track figures.

I allow a £10,000.00 reduction against the core fee in the multi-track if liability is admitted in the defence, or before the defence is filed.

Although I do not set out advocacy fees in the examples given below, as they are complicated enough in any event, my proposal for advocacy fees for clinical negligence claims of £25,000.00 or less are based on the existing personal injury fast-track advocacy costs for personal injury work, but uprated slightly for inflation.

However I have unified the bands of up to £3,000.00 and £3,001.00 to £10,000.00 and so in my scheme there is a single figure for any advocacy involving a claim up to £10,000.00, to reflect the fact that considerable work and travelling and waiting etc. is involved in any trial.

It also needs to be borne in mind that there is no fee for preparation by counsel and therefore, in my view, there should be a higher core fee and I have made that £1,000.00, rather than the existing fees of £485.00 for the lower band and £690.00 for the next band up.

However I propose that they be doubled in any case when liability has not been admitted before the trial of the action.

Thus if the trial is on liability, and not just quantum, then my fees are significantly higher – double in fact – and apply whether the claim is in the fast-track or multi-track.

I set out those figures below and these are add-ons to the figures in the examples given.

Proposed advocacy fees table

 

Clinical negligence claims of £25,000.00 or under – fast-track or multi-track

 

 

 

Department of Health

(All cases)

Kerry Underwood (Liability admitted) Kerry Underwood (Liability not admitted)
Up to £3,000.00 £485.00 £1,000.00 £2,000.00
£3,001.00 to £10,000.00 £690.00 £1,000.00 £2,000.00
£10,001.00 to £15,000.00 £1,035.00 £1,200.00 £2,400.00
Over £15,000.00 £1,650.00 £1,900.00 £3,800.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Claim settles for £1,000.01

 

Stage Option 1

Staged

Flat Fee Arrangement

Option 2

Staged Flat Fee

Arrangement + % of damages

Option 4

Illustrative figures as per table 7 on page 24

Kerry Underwood’s Proposal to

L.J Jackson

Fast Track

Kerry Underwood’s Proposal to

L.J Jackson

Multi-Track

 

 

Pre-Issue

£3,000.00 £1,600.00 £3,270.00 £2,400.00 N/A
 

Post Issue/Pre-Allocation

£3,900.00 £3,100.00 £6,260.00 £3.400.00 N/A
 

Pre-Listing

£5,650.00 £6,100.00 £11,940.00 £4,400.00 £30,410.00 or £20,410.00 if liability is admitted
 

 

Post Listing

£7,150.00 £6,600.00 £10,790.00 £5,400.00 £30,410.00 or £20,410.00 if liability is admitted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Claim settles for £5,000.00

Stage Option 1

Staged

Flat Fee Arrangement

Option 2

Staged Flat Fee

Arrangement + % of damages

Option 4

Illustrative figures as per table 7 on page 24

Kerry Underwood’s Proposal to

L.J Jackson

Fast Track

Kerry Underwood’s Proposal to

L.J Jackson

Multi-Track

 

 

Pre-Issue

£3,000.00 £2,000.00 £4,030.00 £4,000.00 N/A
 

Post Issue/Pre-Allocation

£3,900.00 £3,500.00 £7,620.00 £5,000.00 N/A
 

Pre-Listing

£5,650.00 £6,500.00 £13,460.00 £6,000.00 £32,400.00

or £22,400.00 if liability admitted

 

 

Post Listing

£7,150.00 £7,000.00 £12,670.00 £7,000.00 £32,400.00

or £22,400.00 if liability admitted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Claim settles for £10,000.00

 

Stage Option 1

Staged

Flat Fee Arrangement

Option 2

Staged Flat Fee

Arrangement + % of damages

Option 4

Illustrative figures as per table 7 on page 24

Kerry Underwood’s Proposal to

L.J Jackson

Fast Track

Kerry Underwood’s Proposal to

L.J Jackson

Multi-Track

 

 

Pre-Issue

£3,000.00 £2,500.00 £4,980.00 £6,000.00 N/A
 

Post Issue/Pre-Allocation

£3,900.00 £4,000.00 £9,320.00 £7,000.00 N/A
 

Pre-Listing

£5,650.00 £7,000.00 £15,360.00 £8,000.00 £34,000.00 or £24,000.00 if liability admitted
 

 

Post Listing

£7,150.00 £7,500.00 £15,020.00 £9,000.00 £34,000.00 or £24,000.00 if liability admitted

 

 

 

                                 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Claim settles for £25,000.00

 

 

 

 

Stage Option 1

Staged

Flat Fee Arrangement

Option 2

Staged Flat Fee

Arrangement + % of damages

Option 4

Illustrative figures as per table 7 on page 24

Kerry Underwood’s Proposal to

L.J Jackson

Fast Track

Kerry Underwood’s Proposal to

L.J Jackson

Multi-Track

 

 

Pre-Issue

£3,000.00 £4,000.00 £7,830.00 £12,000.00 N/A
 

Post Issue/Pre-Allocation

£3,900.00 £5,500.00 £14,420.00 £13,000.00 N/A
 

Pre-Listing

£5,650.00 £8,500.00 £21,060.00 £14,000.00 £40,000.00 or £30,000.00 if liability admitted
 

 

Post Listing

£7,150.00 £9,000.00 £22,070.00 £15,000.00 £40,000.00 or £30,000.00 if liability admitted

 

 

 

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Written by kerryunderwood

February 20, 2017 at 9:59 am

Posted in Uncategorized

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