piBlawg

the personal injury and clinical negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

Mind the Gap!

At least you know where you are with the NHSLA. The same is true of the various medical defence organisations. Can the same be said for the new regime proposed under the Health and Social Care Bill (HSCB)? If there are gaps in the indemnity arrangements for NHS care, what does this mean for claimants and defendants? On Friday (24 February 2012) the Department of Health (DOH) issued a short guide for providers of NHS-funded services outlining the proposals in the HSCB. Guide for Providers According to the guide the HSCB “establishes a comprehensive, proportionate and robust legal framework for sector regulation to protect patients’ interests”. NHS services will continue to be delivered by a “mixed economy of public, independent and voluntary sector providers”. A joint licensing regime, applicable to “all providers of NHS services” will come into effect for foundation trusts in January 2013 and other providers from April 2013. The guide also refers to the basis of pricing and payments for “independent sector providers, charities and social enterprises”. What is not clear from the guide is how it is proposed to ensure that these new “providers” have and in keep in place adequate insurance for the care which they provide to NHS patients. If, as the current draft of the HSCB would suggest, there are gaps in the indemnity arrangements for NHS care, claimants may face difficulties in obtaining compensation for substandard care and defendants will be operating with uncertainty over who is liable for what under the proposed new regime. The recent problems with PIP breast implants illustrate what happens when responsibilities become blurred. The danger is that with the HSCB encouraging numerous new “providers” of health care services across both the private and voluntary sectors, there will be confusion when things go wrong. Even if a potential defendant can be identified the HSCB does not at present require new “providers” to meet pre-set indemnity levels. What is to happen if a “provider” is under-insured or goes out of business as some clinics have threatened to do in relation to PIP breast implants? Is there then a claim in negligence against “the commissioning consortia” which may be an individual general practitioner arising out of the original referral? The HSCB still has some way to go to provide the certainty that both claimant and defendants will require if the proposed new regime is to gain the confidence of both. For lawyers faced with increasingly shrill demands to reduce both time and costs, any additional delay in establishing who is responsible and whether adequate indemnity or insurance arrangements are in place will be equally unwelcome. The legal advice from the outset on both sides must be to “mind the gap”.

Whiplash: Again ...

A short article in yesterday’s Guardian caught my eye (Let’s not add insult to personal injury: 20.2.12). It wasn’t the author’s commentary on David Cameron’s recent “Insurance Summit” that attracted my attention (see, Laura Johnson’s PIBLAWG piece a week ago). It wasn’t the reporting of the statistics, although it has to be admitted that these are eye-popping (the CRU apparently reports a 52% increase in reporting of motor personal injury claims – up to 790,999 claims in 2010/11. The reported statistics are not consistent, but everyone seems to agree that there has been an increase in claims and, er/um, the increase has been massive: can we believe that all of these claims are entirely genuine?) Instead, my eye was drawn to the following, “The practice of insurers making a compensation offer to injured people before they have even had a proper medical examination has become more widespread, and they are trying hard to get to third parties quickly and settle their claims before they have gone to a solicitor for independent advice. This all encourages people to have a go. Why, instead, have insurers not challenged in court claims they believe to be bogus? Interestingly, one outcome of the Downing Street summit was a commitment that they will. [emphasis added by me]” It remains to be seen whether the insurers’ “commitment” proves to be real, but we probably all know why such claims are not contested to trial. First, by the time that a modest whiplash claim comes to Court, the costs will usually have outstripped by a considerable margin the amount that is at stake in the claim itself: an obvious reason why insurers will instead seek to settle claims early – even those that are believed to be bogus (indeed, contesting a bogus or fraudulent claim will generate greater costs than taking issue with discrete aspects of a claim believed to be genuine). The problem, of course, with paying Danegeld of this kind is that it simply encourages more claims – as the statistics referred to above make clear. It also removes work from solicitors, although insurers probably won’t lose any sleep over this. Second, it is not easy to satisfy a Court that a claim is bogus; most Judges will apply – whether or not this is acknowledged – a Hornal v Neuberger Products [1957] 1 QB 247 approach to any allegation that a claim is bogus/fraudulent and will require a quantity of cogent evidence in order to find such allegation proved. Some medical expert witnesses are adept at finding a whiplash injury in factual circumstances where it would be surprising (at least to the lay person) that a Claimant had sustained any injury at all. Where such medical evidence is available, it is not easy for the Defendant to challenge this without incurring speculative costs. The result is that, by a default process, the claim will succeed/be settled. Third, it has to be said (on the finest anecdotal evidence) that on occasions the Courts have encouraged questionable claims. One is reminded of the increasing volume of highway tripping claims (some decades ago); the advancing tide was only retarded when the higher Courts started to dismiss these claims and provided guidance on what needed to be proved in order for the Claimant to succeed. If the Judiciary had been less credulous as to whiplash then we might all – genuine Claimants and insurers alike – have been in a happier position. If the Guardian piece is to be believed, we seem now to be reaching a position where only the bravest insurer would challenge a whiplash injury claim at trial; it will be interesting to see whether recent Government action will make any difference.  

The growing perils of litigating on a CFA without ATE...

The High Court has continued chipping away at the iniquitous (as some see it) situation where an impecunious claimant can bring proceedings on a CFA without ATE insurance protection. So if the claimant wins, the costs are paid, if the claimant looses – too bad, the defendant is left to sing for their costs incurred in defeating the claim.   A number of defendants faced with this situation have chosen to go after the claimant’s solicitor for their costs on the basis that, in reality, the Claimant’s solicitor is ‘funding’ the claim (or at least the disbursements) and accordingly they can be held liable for the whole or part of the costs incurred in defeating the Claimant’s claim.   Heretofore the courts have been very reluctant to make any orders that the solicitors firms acting for Claimants pays the winning parties’ costs.   However, very slowly, one senses a change of direction from the senior courts. Most recently in GILL GERMANY v GAVIN FLATMAN : BARCHESTER HEALTHCARE LTD v RICHARD WEDDALL [2011] EWHC 2945 (QB) Mr Justice Eady, in a decision handed down on Thursday 10 November 2011, found in favour of the Defendants on an interim appeal. The Defendants had, at first instance, been refused an order requiring Claimant’s solicitors to disclose the two Claimants’ funding arrangements.   Eady J allowing the appeal made clear that although orders against non-parties were to be regarded as exceptional, that only meant outside the ordinary run of cases where parties pursued claims for their own benefit and at their own expense. The ultimate test was whether it was just in all the circumstances to make the order. A third party costs order could be made in circumstances where the funder was "a real party" not just "the real party". A solicitor would become a funder if he paid out sums on the basis that they would be recovered from the other side in the event of success, or not at all in the event of failure. A solicitor would then be providing funds in the way of business. Any funding role by a solicitor would only be countenanced if it carried with it the risk of having to pay the defendant's costs if he was ultimately successful. A disclosure order was necessary to establish what exactly had passed between a claimant and his solicitor.   This is a trend to watch, I think, and one for firms acting for Claimant’s on CFA’s without ATE insurance to bear in mind.  

Referral Fees to be Banned

  The Government has today announced that it will ban referral fees in personal injury claims. Just a week ago I published an article on the Butterworths Public Injury Law Forum (http://www.personalinjurylawgroup.co.uk/index.php?/Opinion/the-insurance-industrys-dirty-secret.html) setting out the criticisms made of referral fees and the proposals for reform.  Lord Justice Jackson recommended a ban in his "Review of Civil Litigation Costs". However the Government initially seemed ambivalent about such a measure, stating in June that referral fees were only "only a small part" of the no win, no fee system for personal injury claims. However in July the Prime Minister indicated that he was ‘sympathetic’ to the idea of a ban. It is now clear that the Government wishes to pursue this measure.  There is currently no timescale for implanting a ban. However the Government is hoping to have such a measure included in the legal aid bill, possibly by Easter next year.  

Clinical Negligence Claims against the NHS Up 30%

The NHSLA published its annual report on 4 August 2011. Last year: (a)    it faced 8,655 clinical negligence claims, an increase from 6,652 the year before (up about 30.11%); (b)   of those,  5,398 cases were settled with only about 4% being resolved by litigation; and (c)    it paid out £729,100,000 pursuant to these, which was an increase from £651,000,000 the year before;   The report welcomes the introduction of the reforms recommended by the Jackson Review and laments the increased costs they have been facing claimed by claimant solicitors. It states: “We paid over £257m in total legal costs, of which almost £200m (76% of the total costs expenditure) was paid to claimant lawyers... we paid over £257m in total legal costs, of which almost £200m (76% of the total costs expenditure) was paid to claimant lawyers.”   The Report raises many issues. Two of note would be: (a)    Why has there been this recorded increase in claims? Are doctors becoming more negligent, or is our culture simply becoming increasingly litigious and the legal markets have facilitated this? Has the Recession contributed to this? (b)   Whilst they will undoubtedly assist in maintaining proportionality between damages and costs, how will the Jackson Reforms (particularly the irrecovarability of CFA uplifts from unsuccessful defendants), affect access to justice?   The Report is available at: http://www.nhsla.com/NR/rdonlyres/3F5DFA84-2463-468B-890C-42C0FC16D4D6/0/NHSLAAnnualReportandAccounts2011.pdf    

TURKEY VOTING FOR CHRISTMAS?

We are told that motor insurance premiums are at an all time high because of small value personal injury claims and an increase in fraud.  Inevitably the press blame the legal profession and politicians jump on the bandwagon and blame lawyers using CFAs, a means of access to justice which they suddenly forget was introduced by them.  What they also conveniently forget is that lawyers have duties to clients; we can’t just tell them not to recover what the law entitles them; we will be NEGLIGENT if we give them wrong advice.  You can’t blame lawyers for applying the law – it is our duty to do so.  More...

Exaggerate and risk indemnity costs

In Desai vs North Essex Partnership NHS Foundation Trust [8MA25049; Judgment 19th April 2011, trial 14th February 2011; HHJ Knight QC; Central London County Court) the Court found that exaggeration of a claim could leave a claimant open to an award of indemnity costs against her. Mrs Desai had an incident at work on 28th December 2005 in an NHS psychiatric ward. More...

When is an agreement not an agreement?

The Claimant suffered very significant injuries at 8 months old which have left her with life long cognitive and physical impairments. The Defendant admitted liability, including causation, at an early stage.  Proceedings have been issued and, thus far, there has been a great deal of co - operation between the parties. Indeed, this even extended to agreement in respect of (1) a substantial interim payment and (2) a costs order whereby the Defendant would pay the Claimant's costs to date in an agreed amount. Very recently the parties attended court for directions and for an order setting out the terms of the aforementioned interim payements.  The night before the hearing it was quite clear both from discussions between the fee earners and from the face of the documents that agreement had been reached as to the date on which the interim payments would be made. In fact the claimant's solicitors had compromised on the amount of the costs on the understanding that  the payment would be received before the end of their financial year. At court however, a different fee earner was in attendance from the Defendant's solicitors and wanted an extra week to make the payments on the basis that the Easter bankholidays would cause difficulties with raising a cheque by the originally agreed date. The extra week took the deadline outside the Claimant's solicitor's financial year. The District Judge gave the Defendant the additional week. Was this the right decision? For what its worth, I do not think so. It makes a bit of a mockery of the consensus that had been reached by the solicitors. Also (and this is not necessarily  a concern for the court), it does not bode well for future relations between the parties....  

"Oopsadaisy... I forgot": Late amendments and when simple prejudice is not enough

We are all familiar with this scenario.  A case has been in litigation for 12 months since issue and trial is imminent.  Try as you might, you cannot understand why the other side has advanced their case in a particular way, or overlooked an obvious cause of action or defence.  Then... a week before trial, or even at trial itself, the penny drops and a late application to amend is made.  The submission is always thus: "Whilst I appreciate it is inconvenient to the other side and I apologise to the court for the time that has been wasted, one has to apply the overriding objective.  The White Book notes cite Cobbold v Greenwich LBC August 9, 1999, CA, which says "amendments in general ought to be allowed".  To refuse the amendment would be a severe injustice to my client and the other side can be compensated in costs".  And there you have it, amendment granted.  Every one troops off home, to come back in six months time.  Of course the compensation in costs never meets the full extent of the outlay and it is extremely difficult to explain to the lay client why this should be allowed.  Whilst one has sympathy in cases where some new development has occurred that could not reasonably have been unearthed any earlier, for the most part these applications are necessary simply because the case has not been prepared properly.  I strongly suspect most advocates have read no more of Cobbold than the White Book cites and it is often relied upon to argue that demonstration of prejudice by the amending party is sufficient to succeed in an application to amend when it is, of course, only one factor.  In the recent case of Swain-Mason v Mills & Reeve [2011] EWCACiv 14, January 20, 2011 the Court of Appeal has revisited this issue.  Lloyd LJ, giving the unanimous decision of the court, referred to the case of Worldwide Corporation Ltd v GPT Ltd December 2 1998, CA, unrep, a pre CPR decision that was not before the court in Cobbold.  He cited with approval the judgment of Waller LJ where he said: "Where a party has had many months to consider how he wants to put his case and where it is not by virtue of some new factor appearing from some disclosure only recently made, why, one asks rhetorically, should he be entitled to cause inconvenience to other litigants?  The only answer which can be given and which, [counsel for the applicant] has suggested, applies in the instant case is that without the amendment  a serious injustice may be done because the new case is the only way the case can be argued, and it raises the true issue between the parties which justice requires should be decided.  We accept that at the end of the day a balance has to be struck.  The court is concerned with doing justice, but justice to all litigants, and thus where a last minute amendment is sought with the consequences indicated, the onus will be a heavy one on the amending party to show the strength of the new case and why justice both to him, his opponent and the other litigants requires him to be able to pursue it." In light of this and the case of Savings & Investment Bank Ltd v Fincken [2004] 1 WLR 667, CA, which had cited Worldwide with approval, Lloyd LJ concluded in Swain-Mason: "The approach set out in Cobbold seems to me to have been superseded in favour of one which is a good deal less relaxed about allowing late amendments" (para 78).  The practical effect of this is that parties need to be aware of the Swain-Mason decision to argue it against any opponents seeking to make late amendments.  If you find yourself on the other side of this coin, as we all do from time to time, then the guidance from Worldwide, cited in Swain-Mason should be the focus of your supporting evidence.  Although the cases make no mention of CPR 3.9 (relief from sanctions), it would seem that covering those sorts of issues would be a wise move. 

Scotland the Brave?

The Scottish government has announced (20 February 2011) that its plan to reform the system of NHS compensation claims in Scotland has been backed by a panel of independent experts.   http://www.scotland.gov.uk/News/Releases/2011/02/18132915   The No-Fault Compensation Review Group set up by the Health Secretary in 2009 and headed by Professor Sheila McLean, an expert in law and medical ethics, has now recommended changing the current adversarial court system to one of no-fault compensation.   The proposed new system would still require proof that harm was caused by treatment but would remove the need to prove negligence.   The review group suggests more patients could have claims resolved under such a system than currently achieve resolution through the courts. Interestingly the group also considers that the costs of the scheme would potentially be the same as the NHS currently pays in compensation and legal fees.   No-fault systems are already in place in Sweden, New Zealand, Finland, Denmark and Norway and parts of the United States but this is the first time that such a scheme has been proposed in the UK. Whether the scheme will in fact be implemented will depend on whether the Scottish Health Secretary, Nicola Sturgeon, can get the proposal through the Scottish Parliament. We will now have to wait and see, in the words of the famous Scottish song, how   “ … Brave are the hearts that beat Beneath Scottish skies…..”