Reducing Success Fees in Clinical Negligence Cases
Personal injury and Clinical Negligence solicitors have always come under act for the legal costs incurred in these types of cases. The pressure is mounting to try and find a way to reduce these costs following Lord Jackson’s report on civil costs and I believe that this pressure will only increase with the report from Lord Young which is due shortly.
In particular Lord Young has been outspoken regarding the fact that he does not believe it is right that solicitors should profit from cases against the NHS. Although, the figures he quoted in the press have been criticised and are wholly inaccurate, it is probably true to say that his opinion in this regard will be reflected within his report.
In light of this, Claimant solicitors have decided to act regarding the costs involved in bringing a clinical negligence claim by focusing on one way of funding which is called a Conditional Fee Agreement (CFA) or more widely known as a “No Win No Fee” agreement.
How these types of agreements work is that the solicitor will agree to act for the client with a contract which states that they will not charge their fee if the case is lost, but they will charge their fee plus a success fee on top if the case is won. There is also the cost of disbursements (expenses that have to be paid to progress the case) and the Defendant’s costs which have to be paid if the case is lost. Therefore an insurance policy is put in place to cover the Claimant for the risk of such costs.
In these cases the success fee is supposed to reflect the risk that the case will not succeed. This is so that the winning cases pay for the losing ones. Often, as clinical negligence cases are so complicated and it is difficult to know whether there is a solid case until the medical evidence is obtained, success fees are charge at 100%. This means that if the case is won the Claimant’s solicitor will be paid all of their costs plus their costs again. However, in reality this rarely happens and success fees are subject to the discretion of costs judges or negotiation reflecting the true risk faced by the client and their solicitor.
It has been suggested that the best way to deal with the rising costs is to stop the recoverability of success fees. This means that the Defendant’s will no longer pay these in winning cases and if there is a success fee these will have to be paid by the Claimant out of their damages. In practice it is felt this could restrict access to justice for innocent claimants with less than certain claim that require such specialist investigation. Without success fees, there is not extra payment on winning cases to meet the costs in investigating the ones that then cannot proceed. Without the ability to investigate the more difficult cases it is felt some victims of medical accidents will be left with no remedy and further the law of medical malpractice will not develop. Without having this system of redress there is also the risk that medical accidents and malpractice may continue as the threat of litigation will be less likely.
I believe that this as well as the tightening restrictions regarding public funding will make access to justice very restricted in this area of the law.
It is worth mentioning at this point that a good way of keeping costs down in this matter would be for the Defendants to be open and objective from the beginning of the claim and for them to deal with the matter in a timely fashion. However, often the Defendants drag their feet in matters and can deny liability until very late on in the case. This causes unnecessary delay and increased costs.
Settling cases early is better for the client, because it means that they are able to move on with their lives without litigation hanging over them and also it means that they can have rehabilitation sooner, which hopefully means that if they have not already done so, they can recover more quickly.
Claimant solicitors, led by the Association of Personal Injury Lawyers are now working together with the NHSLA, who is the legal department for the NHS to come up with a solution to success fees.
The most obvious solution would seem to be to have a staged success fee, which would be linked to the Defendant’s behaviour. This will deal with both problems because it will reduce costs, but only if Defendants act in a reasonable and timely manner.