by Paul Sandford director of ASM Plus and convener of its Medical Team, assisted by Dr Russell Foster, the ASM Plus Medical Director
One book that holds pride of place on my shelves is the brilliantly written “How to Lie with Statistics” by Darryl Huff. Mr Huff warns against the dangers of undue reliance on statistics and demonstrates how they can be skewed, misinterpreted or simply abused. Accordingly, in writing this blog I have been careful to avoid rhetoric of the “9 out of 10 cat owners said that their cats preferred it” variety.
However, in the context of NHS litigation costs, there is a very strong and justifiable element of letting the figures speak for themselves. Statistics are one thing but plain economic common sense is another.
Consider the following:
- Total NHS spending for the financial year 2016/17 amounted to something in the region of £120 billion.
- In that period, the NHS allocated £56 billion in respect of anticipated compensation payouts for medical negligence cases.
- In 2017 the Financial Times (FT) reported that in the decade 2006/07-2016/17, legal costs payouts made in respect of successful claims rose from £400 million per year to £1.6 billion per year a trend that looks set to continue.
- A Guardian report dated February 2017 refers to a Medical Protection Society study which suggests that the annual cost of settling claims will double by 2023. 
- The NHS net deficit for the 2015/16 financial year was £1.851 billion (a £599m underspend by commissioners and a £2.45bn deficit for trusts and foundation trusts). The provider deficit for the 2016/17 financial year has been confirmed at £791m.
A simple reading of these three statements suggests that in that particular year the NHS allocated not far off 50% of its budget to the contingency of litigation fees. Add something in the region of £1.6 billion per annum in legal costs and what I loosely term the 50% NHS litigation contingency allowance becomes even more of a reality.
The costs figure included in the rudimentary statistical analysis set out above is accurate but the reality is even worse. This is not because of any flaw in my analysis but because in so-called “low value” medical negligence cases, it is by no means uncommon for the costs incurred in individual cases to disproportionately exceed the awards or settlements that have been made. A previous #ASM PLUS blog commented on not untypical case in which a by no means ungenerous out-of-court settlement of £3500 was “rewarded” with a £50,000 cost payout. A UK Times article  published in February 2018 reported that in another instance, for a case in which a patient was awarded £1000, the lawyers claimed £83,000 in costs.
As worrying as these figures are, they do not apparently take account of the issue of hidden costs, namely the internal costs of administering medical negligence claims e.g. providing access to medical records, the seconding of admin staff to assist with such cases and/or to give written or oral evidence, effectively servicing, even subsidising the litigation. I suspect that no one has yet even attempted to compile meaningful figures to identify these hidden costs, hence no detailed statistics. However, these are likely to be substantial and it is equally likely that they have a very significant adverse effect on day-to-day NHS cash flow.
The Times article also reported on a government proposal for restricting lawyers by capping the costs that they can recover in individual clinical negligence cases. The article reports that government ministers were set to establish a working party following a consultation process on introducing the cap that took place last year. This process had in turn been recommended in a prior review of civil litigation costs conducted by a senior judge, Lord Justice Jackson in 2009, almost a decade ago. It is not clear when the report of the new working party will be published but the implication of the Times article is that this will not be any time soon and I cannot help but wonder if there is an element of “too little too late”.
In recent years there have been both NHS and governmental moves to address such issues. It seems that belatedly, the NHS has accepted, or perhaps more correctly reluctantly admitted, that mediation has a role to play and its limited use has not proven unsuccessful. However, I cannot help thinking that notwithstanding this, in reality there is an innate reluctance on the part of this body to embrace real change.
The NHS appears to guardedly concede that mediation could be of benefit to it. The government appears set to implement a strategy that may result in short-term cost savings (I suspect not as high as the £45 million estimate quoted in the article). However, lawyers and litigants will not necessarily lose their respective appetites for litigation given the issue of hidden costs, it is absolutely essential that in the very near future, the responsible authorities take the opportunity and embrace mediation. Along with this and as a viable alternative to possible further sequences of enquiries and consultations which will inevitably be staffed by high-paid professionals, the government should simply make some relatively straightforward amendments to the existing court procedure rules so as to give ADR (Alternative Dispute Resolution) much greater prominence.
Why would mediation or another form of ADR make a difference in medical negligence cases?
Increased use of mediation will not result in litigation withering away and personal injury and medical negligence lawyers will not find themselves out of a job any time soon. However, a strategically altered set of court procedural rules that either requires compulsory mediation or otherwise provides for very rigorous costs penalties and reductions in financial compensation for those who unreasonably refuse it would yield very significant savings in as little as two years. Particularly if a newly implemented system allowed for simple stratagems such as meaningful apologies at an early stage, the long-term cost benefits will increase substantially. If implemented quickly, the benefits of these amendments will materialise not somewhere down the line after committees, lawyers and politicians have evaluated at length but rather, by the end of the next financial year with significant year-on-year improvements to follow.
In cases that settle at a relatively late stage, compensation payouts tend to be higher because as litigation progresses, views become more entrenched. Also, there is a tendency in litigation for he/she who shouts loudest to get the most attention and by implication to receive a disproportionately high level of the compensation and cost budgets.
Early use of mediation in medical negligence cases would help address many issues before costs start to accumulate and the different “sides” become too entrenched. Parties could either be represented in mediation or else appropriately advised and there is no reason to conclude that genuinely aggrieved litigants would receive lower awards. Because mediation is a timely means of dispute resolution that gives all interested parties a much better measure of control, the NHS would have a greater understanding of where individual cases had gone wrong. Equally, it would be in a much better position to implement any necessary changes and to identify bogus or overstated claims at a much earlier point. Locally and regionally based legal and managerial staff would be well placed to monitor developments and aggrieved patients would be more likely to get meaningful answers and apologies which is what many of them really want.
The ASM PLUS Team undertakes all types of ADR related medical work and has considerable training expertise. It comprises Paul, the convener, Ben Beaumont, Joanne Byrne, Francesco Albertelli and our medical director, Russell Foster. If you have a medical related issue you would like to informally discuss, please telephone Paul on 07476 279307, email us on email@example.com or visit our website at www.asmadr.co.uk.
1 see https://resolution.nhs.uk/wp-content/uploads/2017/07/NHS-Resolution-Annual-report-and-accounts-2016_17.pdf and https://www.nhsconfed.org/resources/key-statistics-on-the-nhs
3 see https://www.theguardian.com/society/2017/jun/23/cost-of-nhs-negligence-claims-is-likely-to-double-by-2023-study-medical-legal and https://www.theguardian.com/business/2017/feb/27/nhs-faces-new-1bn-annual-bill-after-reckless-change-to-injury-payouts
4 “Medical Mediation – What has Robin Hood got to do with it? Published on the ASM blog in July 2016” -https://www.albertsquaremediation.co.uk/single-post/2016/07/04/Medical-Mediation-what-has-Robin-Hood-got-to-do-with-it
5″Lawyers Face Costs in NHS Negligence Cases”, The Times, 02/15/18
Principal Director of ASM PLUS, civil/commercial, workplace, employment, family and educational mediator and trainer with a judicial/legal background. He has knowledge and expertise in dispute resolution in a wide range of areas and disciplines and mediates online.