Saturday, June 24, 2006

Redressing the compensation culture

This is a chapter which I wrote for a new book which is now available on amazon called The Future of the NHS edited by Dr Michelle Tempest.

"Discourage litigation. Persuade your neighbours to compromise whenever you can. Point out to them how the nominal winner is often a real loser -- in fees, expenses, and waste of time. As a peacemaker the lawyer has a superior opportunity of being a good man. There will still be business enough.”
Abraham Lincoln, Notes for a Law Lecture, 1 July 1850

Arguments go both ways as to whether this country is in the grip of a co-called ‘compensation culture’ or not. What is clear is that the costs of litigation have risen enormously in recent years. For example, in 1974 the cost of NHS clinical negligence claims was only £1million. By 2003, this had risen to £477 million, an amount equal to the cost of 22,700 extra nurses. However, the cost is nothing like the scale of that in the United States that is almost always the source of reference when raising the issue. In that country, medical litigation costs are estimated to cost £13 billion a year or 0.2% of GDP as opposed to 0.04% of GDP in this country.
Whatever the truth of it, no-one likes to see the NHS losing money and resources on legal claims. However, there are not many victims of clinical negligence or malpractice who do not feel the right to be compensated in one form or another. So, too, no-one wants doctors to be free of any accountability whatsoever. On the other hand, nobody wants doctors to feel so threatened by litigation and professional sanction that they will not act if there is the slightest risk.

These are some of the tensions inherent in the system which allows for both compensation for accidents and some degree of risk in medical treatment. Ultimately, it boils down to a balancing act of two issues in particular. First, allowing risk but maintaining safety and second, reducing cost whilst avoiding injustice.

Compensation culture
A large part of the bemoaning of a compensation culture involves not the overall figures that do not appear to bear out the accusation but instead the extreme cases. Often apocryphal, they range from being burnt by coffee in a restaurant to being injured due to failing to apply the brakes on a toboggan run in an amusement park. Whilst the public rarely get to hear the full stories of such cases they become part of the collective unconscious, something to rail down the pub or in the canteen.

As with many myths, however, there is often a degree of truth and certainly this is borne out by the facts in personal injury generally. In the past thirty years personal injury law has been extended into all sorts of realms never before expected. Part of this has been down to judicial activism and partly due to both national and European legislation. A classic example of how the courts have extended liabilities comes in the area of sport in which we have seen liabilities established in recent years not only against players on the field but even as far as referees and governing bodies. As for legislation, this is most frequently seen in the health and safety at work regulations which were introduced in the 1990s and which place onerous duties on employers in relation to health and safety. This change towards a culture of blame and arguably away from personal responsibility was reflected in the increasing costs of litigation for the NHS.

Legal retreat
The high water mark of such a culture was reached in the courts in the case of Tomlinson v Congleton Borough Council in 2003 in which the House of Lords dismissed a claim for injury caused by diving into a shallow lake on the basis that the risk was obvious. Lord Hutton, for example, stated “it is not, and should never be, the policy of the law to require the protection of the foolhardy or reckless few to deprive, or interfere with, the enjoyment by the remainder of society of the liberties and amenities to which they are rightly entitled.” This was very much seen as a retreat from previous decisions and as sending a message for all litigants in personal injury, which would equally include those claiming for clinical negligence.

The spirit of the judgment in Tomlinson is now being enacted into law in the Compensation Bill currently before Parliament. In particular, it will allow a court to be able to consider the wider social value of the activity in the context of which the injury or damage occurred. Clearly, this is aimed at everyday activities such as adventure holidays rather than clinical negligence cases. However, it will be interesting to see whether it might also be employed in this context in further trying to limit scope for liability in this area.

Chester v Afshar
However, despite the moves in Tomlinson and the Compensation Bill to redress the balance back in favour of personal responsibility, the House of Lords in fact moved the other way in the field of clinical negligence on the issue of causation in 2004 in the case of Chester v Afshar. In that case they held that where a surgeon had failed to warn of a particular adverse outcome and that outcome in fact occurred, a Claimant did not need to then go on and prove that had she been so warned she would have in fact acted differently. This case in effect turned the law of causation on its head for cases of failure to warn and has made it much easier to prove liability than might otherwise have been the case. Whilst the effects of this judgment will continue to be worked out for years to come in the courts, the important thing to note is that once again it was the courts exhibiting their own form of law-making in order to ensure that a claim did not fail.

The real difficulty with these extensions to the law of negligence and the inevitable increase in claims which follow is that professionals and in this context doctors become more risk-averse. Not only may it discourage the little kindnesses which doctors may have offered more readily in the past but it also potentially has an adverse effect on clinical judgments. As the Prime Minister Tony Blair warned more generally on 26 May 2005, “A risk-averse public sector will stifle creativity and deny to many the opportunities to be creative while supplying a few with compensation payments.”

This is a significant concern for health care professionals and above all risks undermining the spirit of public service and clinical excellence which has always been associated with the NHS. In order to combat these effects, it can be looked at from three angles.

I. Legal basis
The first is to review the law of liability for clinical negligence generally and to assess whether it may need narrowing. Until recently, when the rule was overturned, barristers were immune from being sued for any advocacy they undertook in court. This was on the basis that the fear of litigation may make barristers more wary of being forthright in their submissions and may instead start over-qualifying anything they had to say. Such a principle may be analogous to the position of a surgeon in the operating theatre or to a psychiatrist dealing with an unstable patient. The addition of the risk of litigation to an already stressful situation is unlikely to help a surgeon or psychiatrists’ concentration, particularly when things start going wrong and need remedying quickly. Outright immunity from litigation in certain circumstances or for certain practitioners may therefore be considered. Other issues which could be reviewed include the issue of causation outlined above.

II. Alternative basis for compensation
This is not to say that litigants need not be compensated when doctors are given a status immunity. Instead, alternative systems may be considered. In Sweden, for example, a no-fault system of compensation operates for clinical negligence cases. This was considered in 2003 in the Chief Medical Officer, Sir Liam Donaldson’s report ‘Making Amends’ and ultimately dismissed on the basis that it would probably increase the overall costs due to an increased number of claims. However, it might still be considered appropriate in areas where it was deemed that the public interest is better served by doctors being immune from litigation, such as the examples of surgery and psychiatry mentioned above.

III. Professional ramifications
Another way of enabling doctors to make their judgments independently and without being affected by concerns over litigation would be to ensure that doctors are immune from being disciplined either by their professional body or their employer for mistakes that may have been made. This would be on the strict condition that they provide full and frank disclosure as to their mistake and how it might have been avoided. This would also help to encourage a culture of openness in which doctors not only own up to their mistakes, but are then able to assist in ensuring that lessons are learnt so that they can be avoided in the future. Clearly, this could not be done without any caveats and potential exceptions that might be considered include where the professional action has resulted in the commission of a crime or where the doctor’s continued service might be a danger to his or her patients. This would cover not only the very high stress situations encountered by surgeons and psychiatrists but also the more general concerns of, for example, general medical practitioners.

In order to make this work in practice, a rule would also have to be introduced which disallowed such disclosures being able to be used against doctors in subsequent litigation. This would mean that any evidence would have to be gathered independently of these disclosure statements.

Much less needs to be said about reducing the actual cost of litigation as there have already been many excellent reforms in this regard. First among these were the so-called Woolf Reforms which aimed to speed up the civil litigation system and to reduce its overall cost. In addition, the Compensation Bill currently before Parliament aims to provide better regulation of claims managers and will hopefully forestall abuses such as the encouragement of frivolous or hopeless claims.

The real difficulty with clinical negligence cases is that by their nature they tend to be complicated, particularly on the issue of causation since they involved litigants who were already ill before the harmful event. Therefore, the separating out of the pre-existing illness from the event itself can end up in numerous experts arguing over minute pieces of evidence.

NHS Redress Bill
In order to try and tackle this the government has put forward the NHS Redress Bill which is currently before Parliament. This provides for the establishment of a scheme to enable the settlement, without the need to commence court proceedings, of certain claims that arise in connection with hospital services provided to patients as part of the health service.

Currently, this scheme will only apply to claims under £20,000 and it is to be hoped that this will be extended to all claims in the future as it promises significantly to reduce costs if implemented effectively.

Cost of care
One of the most significant parts of the legislation is that it allows part of the settlement to include contracts for future remedial care that is needed, alongside financial compensation. This is highly important since at the moment, litigants are entitled as of right to claim for the cost of private provision of care (under section 2(4) of the Law Reform (Personal Injury) Act 1948). It is to be hoped that in the future, consideration is given to repealing this section in relation to claims against the NHS and instead enabling the NHS to offer their own care packages for the future. This, in the long term, will hopefully bring down costs with the NHS providing those services it can cope with, and contracting the others in from the private sector.

The other issue that really hasn’t yet taken root within litigation, despite its encouragement in the Woolf Reforms, is that of mediation. One of the difficulties is that parties often pay lip service to considering mediation and then simply get on with the business of time-consuming and expensive litigation. Whilst is very difficult to do much more than encourage it, there are measures which might be used to facilitate this process.

The first is a more thorough investigation by the courts into what efforts were in fact made to try and mediate the case. Judges could be specifically trained to be aware of ways that parties in effect avoid mediation. Further, amendments could be made to the costs rules to ensure that more detailed investigations are undertaken into this area. For example, a condition of seeking costs might be for a party to make a detailed statement setting out the efforts which were made which could then be challenged by the other side.

In addition to this, stricter guidelines for the granting and continuance of Legal Aid could be made with particular reference to the positive and realistic efforts that have been made towards mediation. It appears that in relation to the Redress Scheme the Legal Services Commission will be able to take the refusal of an offer into account when decided whether legal aid will be granted.

Tacitus wrote “The desire for safety stands against every great and noble enterprise”. It is to be hoped that this will not be the case with the NHS and that the need for safety can be balanced against the need for a culture where freedom and creativity are not stifled by rules and regulations. It is therefore suggested in relation to risk that:

1. The law of liability for clinical negligence is reviewed and that certain areas such as surgery and psychiatry should be immune from litigation.

2. Alternative forms of non-fault compensation should apply to these areas.

3. Medical practitioners should generally be immune from discipline subject to certain basic exceptions on condition that they provide full and frank disclosure of their mistakes which would not be able to be used in litigation.

In addition, there are limited areas which still need to be addressed in reducing the legal costs associated with litigation in this area:

1. An extension of the Redress Scheme to cases over £20,000.

2. Consideration of repealing the provision which allows litigants to claim for the cost of private care as of right.

3. Stronger forms of encouragement towards mediation such as greater costs sanctions and stricter Legal Aid Guidelines.

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