Wednesday, February 13, 2013

Changes to CFAs in clinical negligence cases could lead to clients missing out

Brought to you by our friends at Lanyon Bowdler Solicitors

From 1 April  this year changes to the law governing personal injury and clinical negligence claims under ‘No Win, No Fee’ court cases will mean successful claimants will have to pay a proportion of their  compensation towards their costs  and this is likely to deter many injured victims from  taking legal action at all. The government say it hopes the changes will act as a disincentive to anyone bringing spurious claims but as a lawyer who has worked in medical negligence for many years, my experience is that spurious claims are most unusual and  identified very early on and rarely proceeded with.  In reality I consider that the changes will mean that people with genuine claims for compensation, particularly those on limited incomes are likely to be too nervous and reluctant to enter into litigation for compensation, where they will have to pay legal costs out of their damages. This post aims to shed some light on some of the changes to CFAs and how this will affect future clinical negligence cases.

What are the current arrangements?
Currently, most people who make a claim against a private health practice or the NHS will either receive Legal Aid to cover their legal costs, or a solicitor will act for them on a Conditional Fee Agreement (CFA). This is better known as No Win, No Fee agreement which means if your case isn’t successful, you will not have to pay any fees. If you win your case, the costs are met by the losing defendant.

In clinical negligence cases Legal Aid and CFAs are both available to fund cases with sufficient merit. At the moment any person with a clinical negligence claim may be eligible for Legal Aid, provided their chances of success are above 50% and their income is below a certain level. From April 2013 only those who have been injured during pregnancy, labour, or the first eight weeks of life will be eligible for Legal Aid and so legal aid is going for all other cases regardless of whether the potential Claimant may be on a low income.  Most injured parties on a low income will now have to enter into a Conditional Fee Agreement to fund their cases.

Currently if you enter a CFA the solicitors take a risk on their costs and only get paid for their work if they win.  They charge a success fee, in addition to basic charges, to reflect the risk element and the fact that inevitably there will be a considerable proportion of cases which are unsuccessful and where they will not be paid anything at all.  In successful cases the rule has always been the loser pays the winners costs, thus putting the Claimant in the position they would have been financially if the negligence had not occurred.  The Claimant needs to take out insurance against losing, which involves payment of a large premium.  If the Claimant is successful the Defendant has to pay the insurance premium. This means that a successful claimant will recover their compensation and their legal costs will be paid in addition.

The changes to CFAs
The Government’s changes  have been prompted by the opinion that defendants have been paying out too much in costs when they are unsuccessful which is bizarre bearing in mind they have only been unsuccessful because they have been negligent.

However as   of 1 April successful claimants will have to pay their solicitor’s success fee and sometimes an insurance premium, instead of the defendant, from their compensation and be deprived of at least 25 percent of their general damages in order to pay for legal costs.  Clinical negligence cases are expensive because the most important evidence comes from medical experts.  They also take a long time and are inevitably distressing for a person who has been injured having placed their trust in a medical professional or institution. 

The cases take energy and commitment on the part of the Claimant, but they are likely to be disinclined to claim if they consider a large proportion of their damages will be eaten up in legal costs.  This will be particularly likely in cases where the amount of compensation is relatively modest and below £30,000. It will be in the defendant’s interests to make low and unrealistic offers to settle, knowing it will be expensive and risky for the Claimant to proceed with expensive investigations to prove that the case is worth more.
It is the government’s aim to decrease the legal costs involved, but it is very much at the expense of the victim of negligence.

So is there anything you can do now?
The changes are not retrospective so I would recommend anyone who believes they have been a victim of clinical negligence to consult a solicitor now to begin their claim, before the rules change in April.  That way they will be able to recover their legal costs in addition to their compensation. Any Conditional Fee Agreements entered into or Legal Aid granted before April 2013 will not be subject to the new rules, and you could be saving yourself a significant deduction from damages if your case is successful.  Some people may be concerned that they are still receiving treatment for their injury but this will not affect them.  If you consider that you have a claim act now.

About the author: Kay Kelly, partner and head of the medical negligence team at Lanyon Bowdler solicitors in Shrewsbury,  who specialise in providing expert legal advice and support for victims of clinical negligence.

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