No Fault Compensation Scheme a good idea?

The recent report produced by the centre-right think tank the Centre for Policy Studies has called for a no fault compensation scheme for Clinical Negligence claims against the NHS. The logic behind it being that they are too expensive as things stand. 

Notwithstanding the impact that the recent changes to costs will have in reducing the overall cost of all personal injury claims, we need to address the maths.

The CPS has obviously read the Daily Mail (they quote it a lot in the report!) before writing their report but it is a shame that they did not look into this in more detail. Maybe that is because they clearly started from the assertion that ”all lawyers are greedy” therefore all legal costs are an inflation of the true cost of the problem. That is possibly true in Road traffic claims but there are lawyers who spend their time dealing with those who can answer that. I am a medical negligence lawyer so I will stick to what I know well.

The cost of Clinical Negligence claims

The cost of Clinical Negligence claims against the NHS looks high. Cannot get away from that. It looks big.

However what the figures do not show is the potential cost if all those injured by medical care within the NHS claimed and were successful. To understand the potential size of that bill you need to know a little about what we do. We take a cohort of cases and investigate whether the care was substandard and whether injury was caused by any failing in the care. If we get a negative result on one or other then we have no case and the claim goes away at zero cost to the NHS. We bear the cost. The client doesn’t even pay for that. This happens more often that people would think. Most medical negligence firms only litigate about 55-60% of the cases they take on as the rest fail one or other of the tests mentioned earlier. That means the damages paid out represent the damages paid to 55-60% of the people who have consulted a lawyer.

Damages paid

But it gets worse as we turn away about 60-70% of the people that ask for advice in the first place. That means the damages paid are to less than 55-60% of those injured (or who belieive they have been injured) by NHS medical care. In fact the NPSA stats and the NHSLA stats reveal that about 70% of the cases that the NHS knows about where cases would win under the current system do not get brought.

All this means that for every £1 million pounds in compensation paid to those injured by the NHS there is possibly another £3 million (likely more) that the NHS would have to pay out under a no fault scheme. The cost of compensating all the brain damaged babies each year would more than account for that. That is before the NHSLA costs are added on (as presumably someone will have to run the scheme).

The truth is that very few people who are injrued by the NHS come froward as they know it involves lawyers and stress. The system deters many from claiming at all. Of those motiviated to try we screen out about 75% of them at no cost to the tax payer. So this is one case where (contrary to the Daily Mail’s view) lawyers are actually saving the state money. The claimant lobby groups will all talk about justice and that is correct but the biggest argument in favour of the status quo is the fact that we act as the first line of defence against claims that people want to bring. We only pursue the cases where the care was poor and the injury avoidable.

Most cases settle out of court

That is before we get into the fact that most cases against the NHS settle out of court at a reduced value because of the risks of litigation. That means the damages paid to those who do already succeed would increase as well. I will leave it to mathematicians and the Treasury to work out the true cost of the folly of no fault compensation but believe that we cannot afford it. Once suspects that the Labour party already know this as their own scheme floundered as soon as someone got a calculator out.

The report’s authors wrongly assume that we run and win every case we take on and that we will take anything on. Just because some non lawyers (Claims Management Companies or cowboys as I call them) advertise that does not mean that it is what happens on the ground. The Courts are a very good filter for cases. It is the risk of going to court and the knowledge that ultimately a court will decide that prevents us from running weak and unmeritorious cases. We settle out of court because the lawyers on both sides know what the outcome will be. Not because we are ignoring the justice system.

Some basic research may have revealed that. But why let the facts and the true costs get in the way of some very impressive report writing?

If you believe you have a claim for Clinical Negligence, please get in touch today 03333 058375 or email ClinicalNegligence@psg-law.co.uk for a free, no obligation discussion. We’re here to help you.