What now for fixed costs in clinical negligence litigation?

In this blog Isaac Hogarth of 12 KBW considers the the recent Jackson report on fixed costs.

In July 2017, Sir Rupert Jackson’s Review of Civil Litigation Costs: Supplemental Report, Fixed Recoverable Costs was published.

The most significant part of the report for personal injury practitioners relates to the proposed introduction of a new track, to be known as the “intermediate track”, to include personal injury claims valued at £25,000 to £100,000. Sir Rupert proposes that there be a table of fixed recoverable costs under this new track.

In relation to clinical negligence litigation, however, no concrete proposals have been put forward. Chapter 8 of the Report relates to fixed costs proposals in clinical negligence.

The majority of that chapter sets out the various stakeholders’ positions on the subject. Unsurprisingly, claimant firms and representatives argue that fixed recoverable costs are unsuitable for clinical negligence cases due to their complexity and the variability of subject matter. Conversely, the defendant stakeholders argue that fixed recoverable costs ought indeed to be introduced.

It is worth noting that separate submissions were made on behalf of the MDU, the MPS and NHS Resolution, and the three bodies’ submissions were quite different in several respects. In summary,

1. Whilst the MDU does at least acknowledge the increased complexity in clinical negligence, they then argue that that is no basis for higher costs to be incurred than in other injury litigation in respect of which fixed costs apply.
2. The MPS advocates the introduction of fixed costs in claims up to £250,000.
3. NHS Resolution focusses on the apparent disproportion between claimants’ costs and damages.

The thrust of the defendants’ submissions was that claimants’ costs in clinical negligence were disproportionate, and that a fixed recoverable costs system was an appropriate way to address that.

Sir Rupert is clearly in favour of the introduction of fixed recoverable costs in clinical negligence litigation. However, somewhat surprisingly, only (for the time-being) in cases up to £25,000. Whilst he has not put forward any specific figures (in contrast to the section dealing with the new intermediate track in PI cases), he recommends that a working party should be set up to develop a bespoke process for clinical negligence claims up to £25,000 in value with a grid of fixed recoverable costs for such claims.

During his preparation of the report, Sir Rupert asked members of the Leeds Bar to set up a working party to put forward a proposal in relation to fixed fees in clinical negligence. The proposal can be found at Appendix 14 to the Report. Essentially, it is a fixed costs matrix whereby the costs are adjusted dependent upon (1) value, (2) number of matters remaining in issue, and (3) number of experts instructed. Whilst Sir Rupert was clearly impressed with the idea, he ultimately puts it back, saying it may merit further development and consideration in the future.

A few observations:

1. It is accepted within the report that clinical negligence cases are different in that they are more complex generally than PI matters. As such, one would expect the figures to be higher than those for PI cases, currently found at CPR r.45.29C and E.
2. It seems very likely that this is only the beginning. Whilst fixed fees were initially introduced in PI cases up to £25,000 in value, the new recommendation is that the scheme be extended to cover cases up to £100,000 in value. It seems probable that the same extension will follow in clinical negligence.
3. Whilst Sir Rupert says that the majority of clinical negligence cases worth over £25,000 will be allocated to the multi track, he suggests that in some uncomplicated cases, allocation to the new intermediate track (with its own fixed costs regime) will be appropriate.
4. The changes are not so imminent as had been feared. It will take time for the Civil Justice Council in conjunction with the Department of Health to set up a working party and report back.
5. There has not been much emphasis placed on access to justice. Many serious clinical negligence cases involving, for instance, infant fatalities, or dental negligence, may be lower in value than £25,000. However, the input required from experts and counsel will drive the costs up. The emphasis, rightly or wrongly, is squarely on proportionality. If fixed costs are introduced it is inevitable that claimants in complex, but lower value cases will lose out. This is due to the obvious inequality in arms between individual claimants who instruct legal representatives on CFAs, and defendants who are either emanations of the state, or insurer funded, with potentially vast resources. It is to be hoped that the working party is alive to this issue, and the huge potential for injustice that would be caused by an overly restrictive fixed costs regime.