Lawyers aren’t bankrupting the NHS – here’s what is…

Health service leaders recently wrote to the Lord Chancellor calling for reform in the way that compensation awards for injured patients are calculated, on the basis that “this is money that could be spent on frontline care…”. At the same time, they are requesting “more fundamental reform” of the way in which claimants’ lawyers’ costs are calculated, demanding the introduction of fixed costs schemes for claims up to £250,000.00.

Whilst wanting to save the NHS money to use on patient care is, of course, a reasonable aim, the writers of this letter are missing the point; by targeting solicitors they’re treating the symptom of the problem, not the cause.

Time to get some perspective

It is important first of all to get figures in perspective. Total government spending on the NHS for 2017/18 was budgeted at £124.7 billion. The NHS paid out £1.7 billion in clinical negligence last year, which is clearly a huge sum of money, but in percentage terms is clearly not going to solve the NHS’s wider problems even if dramatically reduced.

I will return to the theme of where more meaningful savings might be made later, but first would like to consider a wider ethical question: would reducing compensation payments to patients injured receiving NHS treatment really help anyone but the NHS executive?

It is important to remember that each injured patient will be a taxpayer who has contributed to the costs of the NHS (or in the case of a child, has parents who have contributed). Also, each patient has been injured not through their own fault, but by the proven or admitted negligence of an NHS professional. Further, the compensation agreed or awarded is designed only to put them back in the position they would have been in but for the negligence; it is based on their actual needs. It is not a windfall payment or a lottery win!

So, why the sudden focus on negligence claims?

Part of the argument being put by the health service leaders concerns their recently amended Discount Rate. The Discount Rate is the percentage used to adjust compensation awards for victims of personal injury, according to the amount they can expect to earn by investing it.

The rate was amended in March 2017 from 2.5% to -0.75%, the effect of which was to very significantly increase all calculations of future damages for claimants. However, the effect of the previous Discount Rate of 2.5%, which had remained unchanged for 16 years, had been to vastly under-compensate all claimants, since it significantly underestimated the actual returns which any Claimant could achieve by investing their damages.

Effectively the change last year has, for the first time in 16 years, offered claimants something close to the 100% compensation they deserve.

The political reality, due to the lobbying power of organisations such as the Association of British Insurers, is that the Discount Rate will probably be adjusted back upwards, to 0.5% or 1%, within a year, regardless of this intervention from health leaders. The effect of that will be that injured patients will again be regularly under-compensated.

If injured patients are not legitimate targets for reform, are their lawyers? Lord Justice Jackson has carried out informal research into the probability of imposing a system of fixed fees upon Claimant claims negligence lawyers, and has recorded fixed fees only up to a level of £25,000, considering that a case of justice for injured patients would be denied by placing the threshold any higher. The reality is that access to justice for many patients will be reduced on demand even by a £25,000.00 limit, but certainly there is no justification for a higher limit as proposed by the health leaders.

The NHS has to improve from the top down before blaming others for its problems

So where does the real issue lie? If it lies within the clinical negligence budget, there can only be two answers to this:

1. improve patient safety and hereby reduce claims – claims brought by medical negligence solicitors are always as a result of a real medical error, confirmed by medical experts, so any valid claim has been the result of a real mistake;
2. where there is a legitimate claim, recognise it, apologise, and agree early settlement to minimise legal costs – we often see cases carry on much longer than necessary because a Trust won’t admit liability until they are taken to court.

In a wider sense though, the NHS has become an inefficient behemoth. An investigation by Good Health last year identified more than £7.6 billion being wasted by the NHS every year, including £1.0 billion in unregulated price hikes for medicines, £2.0 billion in paying over the odds for basics such as toilet rolls and £432.00 million on management consultants.

I don’t suggest that the answer to an underfunded NHS is simple; however, depriving those injured by negligent treatment of a proportion of their rights for compensation, or denying them access to justice for all, is clearly neither an officially justified nor an effective solution.