Battlelines Drawn: Fixed Costs and the Future of Clinical Negligence Claims

The new Government has only been in place for a few weeks, and already key stakeholders, including the powerful insurance industry, are beginning to lobby for changes. Central to these early discussions is the issue of fixed recoverable costs (FRCs) in clinical negligence claims, a proposal initially put forward by the previous administration that has sparked significant concern.

The Association of Personal Injury Lawyers (APIL), an independent, not-for-profit organisation that provides accreditation to lawyers specialising in personal injury claims, has long advocated for a society without needless injury. APIL’s mission is clear: when people are injured, they should receive the justice they need to rebuild their lives. A number of Hatch Brenner lawyers are proud members of APIL, aligning with the organisation’s values. Recently, APIL contacted the new Health Secretary, Wes Streeting, urging him to reconsider some aspects of the FRCs proposed for lower-value clinical negligence claims.

APIL has expressed fundamental concerns about the inclusion of vulnerable patients and all fatal claims within the FRC scheme. While APIL agrees that if a predictable process can be established, costs could be calculated in a way that benefits both injured patients and defendants, they caution that not all cases are suitable for the proposed regime. The potential for getting the fixed costs wrong could impose unfair restrictions on patients, bereaved families, and their legal representatives. Moreover, fixing the costs was not discussed at the June meeting of the Civil Procedure Rules Committee, which suggests it is unlikely the new regime will come into force by the proposed date of October 2024. APIL has called on the minister to use this delay as an opportunity to re-examine the proposals.

Supporting this position is the Society of Clinical Injury Lawyers (SCIL), an organisation that represents clinical negligence lawyers and promotes best practices in these cases. Hatch Brenner is also a member of SCIL, an organisation committed to influencing public policy for the benefit of injured persons and promoting access to justice and patient safety. SCIL has voiced concerns about how the previous government’s plans to cap fixed recoverable costs for some clinical injury cases could affect their ability to support vulnerable people across the country.

Like APIL, SCIL warns that the plan, set to take effect from October 2024, could encompass highly sensitive cases, such as birth trauma, stillbirth, fatalities in elderly and paediatric care, and complex mental health cases. They argue that excluding certain types of cases from the scheme would limit its effectiveness and fail to achieve its intended objectives. SCIL is particularly worried that capping the costs specialist lawyers can recover in clinical negligence cases will disproportionately impact the most vulnerable, including people with literacy issues, translation needs, and learning disabilities, thereby limiting their access to justice.

The previous government had a clear vision for reducing the costs associated with clinical negligence claims. However, APIL’s analysis shows that spending on clinical negligence claims represents just 1.7 per cent of NHS England’s annual budget. NHS Resolution’s (NHSR) latest accounts, released in July 2024, reveal that during the 2023/24 period, the total cost of clinical negligence claims, including damages and legal costs, increased in line with inflation in the wider economy.

Spending on damages rose by six per cent compared to 2022/23, while claimant legal costs increased by 11 per cent. This rise in costs can be attributed to several factors, including high levels of inflation, which have driven up costs across the board—from rent and insurance to court fees and expert witness charges. Delays in settling claims have also contributed to increased spending. Clinical negligence claims valued under £25,000 have been particularly affected by these delays. Between 2014/15 and 2022/23, the time it takes NHSR to settle claims between £1,501 and £25,000 increased by 30 per cent. NHSR itself has acknowledged that “the longer cases run for, the higher the costs.”

Despite these challenges, the long-term impact of claimant legal costs on the overall clinical negligence bill has been decreasing. In 2023/24, claimant legal costs made up 19 per cent of all clinical negligence spending, down from 29 per cent in 2016/17. It is important to note that the majority of clinical negligence costs continue to be driven by a small number of high-value obstetric claims. In 2023/24, these claims accounted for 13 per cent of reported claims but made up 57 per cent of claims by value. Additionally, only a small fraction of patients harmed by the NHS go on to make a claim, with recent data showing that fewer than two per cent of patient safety incidents resulting in harm lead to a claim.

APIL Vice President Guy Forster commented on the human impact behind these statistics, stating: “Behind the numbers are thousands of injured patients and bereaved families, whose suffering could and should have been avoided. There are also countless patient safety inquiries, followed by reports and recommendations, but we see the same failures in care happening again and again.” He emphasised the urgent need for an overarching strategy to address the issues causing needless injuries and deaths.

Forster also noted positive developments, such as the trend towards settling more cases before legal proceedings, which indicates improving efficiencies and collaboration between parties. However, he stressed that further improvements are necessary, including earlier admissions of liability by NHS Trusts to ensure that injured patients can access timely rehabilitation.

Meanwhile, the Medical Defence Union (MDU), which insures many medical professionals, is also lobbying the new government to ensure that fixed costs rules are introduced for lower-value clinical negligence claims (up to £25,000). The MDU has also written to the Secretary of State, reinforcing the call for these reforms.

As the government considers its next steps, the outcome of this debate will be crucial for the future of clinical negligence law and patient rights.

UPDATE: 30 May 2025

The House of Commons Public Accounts Committee reported just this month on health spending and one of its focuses was on the amounts paid out for clinical negligence. The committee questioned why the government has still not addressed the issue and said especially that lawyers’ costs need to be dealt with as a priority.  The committee said it was ‘unacceptable’ the Department of Health and Social Care has not developed a plan to deal with clinical negligence costs with so much taxpayers’ money being spent on legal fees. It recommends a strategy is put out by ministers with clear ideas of how to reduce patient harm and manage the costs of clinical negligence more effectively.

The Department of Health and Social Care says there is no evidence to suggest that rising clinical negligence costs are due to a decline in patient safety and that claim volumes have remained stable in recent years. The department believes they are likely to be rising because of a range of factors, including higher compensation payments and legal costs, rather than claim volume or patient safety, adding  ’The costs of clinical negligence claims have also more than doubled in the last decade. We will examine the drivers of costs, how to manage spending on clinical negligence and the potential merits of reform options.’

There was a recent question posed in Parliament, to the Department of Health and Social Care which was answered by the Government as follows:-

The rising costs of clinical negligence claims against the National Health Service in England are of great concern to the Government. Costs have more than doubled in the last 10 years and are forecast to continue rising, putting further pressure on NHS finances.

The causes of the overall cost rise are complex and there is no single fix, as costs are likely to be rising because of a range of factors, including higher compensation payments and legal costs, rather than more claims or a decline in patient safety.

We recognise that this is an important issue, and ministers intend to look at all the drivers of cost

In summary, the start of 2025 shows no let up in pressure being applied for reform of the clinical negligence compensation system to ensure the sustainability of the NHS. As ever watch this space

Those affected by clinical negligence should have access to legal advice that prioritises their well-being and financial security. If you’re searching for personal injury solicitors near me, Hatch Brenner’s experienced team in Norwich offers specialist support for clients navigating the complexities of medical injury claims. With a deep understanding of current reforms and a commitment to justice, they work to ensure fair compensation is secured, even in challenging lower-value cases.

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