Clinical Negligence Compensation & Costs - Insurers' smoke and mirrors?

Wednesday 31st October 2018

The issue of costs in clinical negligence claims has again been raised in the press. This time, the Medical Defence Union (MDU) has been beating the drum, stating that solicitors’ costs are still outstripping compensation in some claims.

As a bit of background, the MDU bills itself as the UK’s leading medical defence organisation. It provides medico-legal assistance to doctors and dentists throughout the UK, defending them in claims involving allegations of clinical negligence. It has said that there are still cases where the compensation ends up being lower than the Claimant’s costs.

The MDU responds to 40,000 requests for assistance per year, but unfortunately it was only willing/able to refer to 2 examples where the compensation was indeed lower than the legal fees. Whilst I appreciate that there must be many more cases where costs outstrip compensation, these cases are in the minority, and there are other factors in play which lead to costs becoming higher than compensation. This is where the insurers’ smoke and mirrors make an appearance….

At the outset of every claim, a Claimant’s solicitor should assess the likely compensation available and work out how much money is likely to be spent investigating and settling a case. If it’s clear that the costs are much higher than the likely compensation, a solicitor can be criticised for taking the case on as it would be disproportionate to do so. The thinking being that a privately paying client wouldn’t risk their own money in such a claim; they wouldn’t spend good money on bad and spend, say, £50,000 to try and recover £20,000 in compensation (these are the figures criticised by the MDU).

Well on paper, perhaps. But what about if that person had been injured as a result of someone else’s negligence? What if they had £50,000 to pay a solicitor, and wanted justice? What if that person had lost someone close to them, and the deceased passed away as a result of someone’s negligence? There are other factors there, recognised as being valid by the courts, which lie outside of pound signs and lead to ‘disproportionate’ claims being, well, proportionate.

And then it can be easy to criticise Claimant solicitors, racking up costs at the chagrin of insurers. It would be remiss to say that this doesn’t happen at some firms. But are Defendant solicitors entirely beyond reproach? There are several cases I have experience of where Defendant solicitors have denied liability for years, until finally capitulating and settling the claim. In cases where liability is denied, Claimant solicitors have two options: abandon the case, or fight on. If you don’t give up at the first hint of difficulty and fight on, the compensation stays the same but the costs continue to rise above what had been expected at the outset of a claim. If liability is denied and a case is fought out at Trial, that is all fair and well; the parties test their evidence and someone comes out on top. If liability is denied, and a case is settled before Trial, one does often wonder why a Defendant hasn’t either fought it out at Trial if their evidence supports a defence, or simply settled earlier, when the costs are much lower if their defence is lacking. The ‘risk of litigation’ argument can only carry for so long.

So, whilst I accept that there are some Claimant firms out there who deserve criticism, there are Defence organisations and firms who aren’t beyond reproach either. Rather than both sides tolling the bell, increased dialogue between the two sides may be a more productive approach so long as both sides are honest in accepting their weaknesses.

Joseph Norton, Head of Compensation

Waldrons Solicitors