Neutral Evaluation saves the NHS £454m

7th February 2022

By TONY N GUISE

This was the attention-grabbing evidence of Maria Caulfield, MP and Minister for Patient Safety & Primary Care at the Department of Health and Social Care (DHSC) to the Health and Social Care Select Committee of the House of Commons on 1 February 2022.  The Minister’s remarks were made on the final day of oral evidence to the Health and Social Care Select Committee’s NHS Litigation Reform Inquiry.

£454m is the Government estimate over 10 years of a package of reforms intended to save money and make the justice system faster and fairer for patients and families suffering from clinical negligence resulting in court claims valued at less than £25,000 – these are the so-called Low Value claims.

Concern has been expressed that legal costs can sometimes exceed the level of compensation achieved by a wide margin.  It is this lack of proportionality which has encouraged the Department to reform the system ever since concerns were expressed about costs and compensation in a DH Consultation in January 2017 and in a Report from the Public Accounts Committee (the PAC) in December 2017.

The proposals are intended to:

• Cap the costs charged by Claimant’s solicitors – almost always paid by the NHS;
• Introduce a bespoke system for managing those claims; and,
• Resolve claims before court proceedings are issued using a tiered dispute resolution approach leading to mandatory neutral evaluation.

These proposals were published in a Consultation entitled: “Fixed recoverable costs in lower value clinical negligence claims” published on 28 January 2022.

Lower Value claims make up roughly 51% or 6,100 cases of the ca 12,000 cases of clinical negligence arising every year (see p.6 of the Impact Assessment to the Consultation Paper).  Thus the proposals affect a significant proportion of this market.

In more detail the DHSC headline proposals include:

Capping costs

The Consultation proposes fixing the costs in line with a scale.  Those costs will be the sums that can be recovered from the unsuccessful side (usually the NHS).  The sums paid by clients will not be fixed as those are a matter for the contract between solicitor and his or her client.

The Consultation proposes using the scale of fees favoured by the Defendant side which will be understandably controversial.  It is not beyond the realms of possibility that the final scale will be arrived at following mediation.

Bespoke claims management process

The claims process envisages two tracks: Standard and Light.  Standard is for most claims where liability and the value of the claim is in dispute whereas the Light Track is for simpler cases where, say, only the amount of the compensation is disputed. As the Consultation says: “All parties are required to participate in the specified stages seeking rapid resolution where that has not yet been achieved.” (p. 28)

Both tracks have the same requirement to act in Good Faith; a concept also seen in the recent CJC Consultation on the Pre-Action Protocols.

Sequential exchange of evidence and case explanations are required in both Tracks.

The Standard Track is expected to last a maximum of 44 weeks whilst the Light Track is expected to last a maximum of between 20 and 38 weeks.  The focus, the Consultation Paper says, is on those periods being maxima to deliver rapid, but fair, resolution.

Tiered dispute resolution

In the Standard Track there is a requirement to make offers to settle with a mandatory Joint Stocktake Meeting common to both Standard and Light Tracks.  The parties are encouraged to “work toward settlement” at these meetings.

In the event the case cannot be settled before there is to be a mandatory (but non-binding) neutral evaluation by a suitably qualified barrister to be selected from a panel.

The Consultation makes clear (p.36) that “many claims should be resolved well before a mandatory neutral evaluation is required.”

Sanctions

These are intended to incentivise fulsome engagement with the process.  Failures can be addressed at trial by the Judge on the question of costs recovery.

In this respect the proposals adopt an approach which is used at present to address failures to comply with Pre-Action Protocols.  This approach is seen by many as an ineffective sanction.  It is an approach at odds with the CJC Working Group on Pre-Action Protocols.

In their recent Interim Report the Group recommended a Court hearing shortly after proceedings commence to consider any objections of non-compliance with Pre-Action requirements.  The full range of sanctions, they propose, would be available to a Judge on that occasion including the power to stay or strike out claims.

Online?

With 6,000 cases every year to process within tight timetables a Cloud based platform will be essential in our view to manage the process and enable selection of Evaluators where that becomes required with data streaming to facilitate empirical review.

The reception so far

Whilst it is too early to say how the latest DHSC Consultation will be received we can look to the responses to the 2019 Civil Justice Consultation on the same issue.  Many firms of solicitors and professional associations supported introducing a fixed recoverable costs regime and neutral evaluation.  Some firms argued that the proposals could only work if using a Cloud based platform through which to collaborate with the parties, their representatives and NHS Resolution. Thereby minimising inefficiencies whilst maximising the margin within the recoverable costs allowed.

The case for all of that has only gained greater weight in the past 2+ years as costs continue to increase (from £1.6bn when the PAC looked at the issue to £2.2bn today).  The Impact Assessment for the current Consultation estimates up to 3,000 claims will be resolved without Court proceedings being commenced (p.22, Impact Assessment).

What is also clear from the work of the CJC is that this pre-action process will be placed in a Cloud based system either voluntarily or following rules introduced by the Online Procedure Rules Committee to be established later this year once the Judicial Review and Courts Bill becomes law in the next month or so.

Tony is the Director of DisputesEfiling.com Limited (DEF) which is the provider of Cloud based platform for the management of evaluations to Independent Evaluation and Facilitation Service (IEFS) Limited.  Tony is a past President of the London Solicitors Litigation Association, he speaks and writes regularly on issues concerning civil justice reform in England and Wales.