Surge in negligence claims due to ‘no win, no fee’ legal representation

THE proportion of middle income people in England and Wales pursuing claims following adverse medical events increased from less than four per cent in 2001 to 22 per cent in 2013, according to research published by the Nuffield Foundation.

This rise can be attributed to the growth in lawyers working on a ‘no win, no fee’ basis which has removed the financial barrier to pursuing a clinical negligence claim for many people.

The researchers also found that, conversely, those in the lowest income group are now less likely to make a claim following an adverse event (7 per cent in 2013 compared to 15 per cent in 2001). This may be due to the withdrawal of legal aid reducing the propensity of those on lower incomes to make claims.

The study funded by the Nuffield Foundation looked at datasets from the Compensation Recovery Unit (CRU), which records information on all claims for compensation relating to personal injury in England and Wales, and also from the NHS Litigation Authority (NHSLA) including all claims made against NHS acute hospital trusts and settled between April 2008 and April 2013 (and those outstanding at 1 April 2013).

Data was also drawn from a survey on the incidence of adverse events relating to healthcare and whether a legal claim was pursued.

The researchers found that the number of claims for clinical negligence fell between 2001 and 2009 but then rose between 2009 and 2013. A total of £1,259 million was paid in connection with clinical negligence claims in 2012/13 compared with £787 million in 2009/10. The increase in claim frequency over recent years correlates with the emergence of 'no win, no fee' funding as the predominant route for making claims.

The proportion of successful claims increased from around 45 per cent in 2001 to around 70 per cent in 2009, which the researchers surmise may be because 'no win, no fee' lawyers are more cautious about taking on risky claims than the Legal Services Commission (formerly responsible for administering legal aid). But there are signs that this increase in the success rate had stopped and may have been reversed after 2009, possibly reflecting a less cautious approach to risk assessment on average as new, non-specialist law firms entered the clinical negligence market.

The study also identified a possible reluctance on the part of 'no win, no fee' lawyers to consider high-risk, high-value claims, such as those involving serious injury to children. Incidents involving babies and children older than eight weeks are no longer eligible for legal aid since the implementation in April 2013 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).

Lead author Professor Paul Fenn, Emeritus Professor at Nottingham University Business School and Senior Visiting Fellow at the Health Economics Research Centre, University of Oxford, said: “There have been concerns that the shift to using 'no win, no fee' lawyers to fund the majority of clinical negligence claims might act as a barrier to justice because lawyers would be too cautious to take cases, or conversely that they would lead to a surge in ‘ambulance-chasing’ behaviour.

"Our research shows that neither of these things has happened, although we need to keep a close eye on high value claims relating to infants over eight weeks to ensure this group is not falling through the cracks. We also need to be aware of the recent trend towards higher claim frequencies and costs with a view to monitoring the impact of the LASPO reforms introduced in 2013."