A new report is seeking views on limiting recoverable costs in lower value clinical negligence claims.
Mediation has had a part to play in clinical negligence claims since the NHSR set up its own scheme. The new proposals however recommend early neutral evaluation. This is perhaps a sign that when the MOJ responds to its call for evidence on mandatory ADR it will come down more towards a mixed model rather than a “one size fits all” approach. The ENE proposals involve setting up a panel of barristers to provide non hinding ENE opinions. The proposals are as follows:
Mandatory neutral evaluation
The CJC set out a proposal for mandatory neutral evaluation (MNE), an evaluation of the claim to be carried out by an independent specialist barrister of a minimum level of experience selected from a pre-agreed panel. This is based on the expectation that a) the majority of claims will be settled at an earlier stage, including at the mandatory stocktake stage; and b) that there will always be a minority of cases in which agreement is difficult to reach in the pre-issue stage.
We agree with the CJC that in order to facilitate as many claims as possible to settle within the FRC scheme, there should be some form of neutral dispute resolution, capable of addressing all points at issue in a claim, and that this step must be mandatory and fair to all parties. At the same time, we agree it is important that the outcome of the evaluation should be non-binding so as not to preclude either party from accessing justice in the courts.
Although this is a new approach to resolution of clinical negligence claims, there is precedent for this approach in other areas of law, notably in the frequent use of family dispute resolution in the family courts.
We believe that the CJC’s proposals on MNE support our aims to ensure as many claims as possible can settle fairly within the FRC process, and without the delay and disproportionate costs involved with claims that extend into the courts, though use of the courts will still be possible.
Our proposal, in line with the CJC report, is that if claims are not resolved at the mandatory stocktake stage of the process (or the further evidence stocktake stage in a minority of light track claims) there should be a mandatory, paper-only evaluation, with the evaluator providing a written opinion on their assessment of the likely outcome on liability, quantum or both aspects of a claim, as needed. In doing so, the evaluator will need to record and analyse the relevant parts of the evidence and to give reasons for their conclusions. This evaluation would then be provided to both parties within a 4-week period.
However, in most cases that progress to the evaluation stage, we expect the focus of any dispute to be on liability rather than quantum, as quantum can typically be addressed through negotiation.
In certain cases, it may be necessary for evaluators to move beyond the paper-only process and seek clarification from experts. However, if this were permitted in all cases, it would undermine the speed and cost effectiveness of MNE. We propose setting out, prior to implementation, criteria governing when this is permitted, so it is strictly limited to only the most complex of claims.
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Fixed recoverable costs in lower value clinical negligence claims: – a consultation
Evaluator fees
We propose that the evaluator’s fees are shared equally at the outset by claimant and defendants who, having failed to agree a settlement at the mandatory stocktake stage, decide to take this further step. Evaluators will be paid a fixed fee for an evaluation, the amount to vary depending on whether the evaluation is on liability issues only, quantum only, or liability and quantum.
The CJC report included two sets of indicative evaluator fees proposed by the Bar group (with claimant approval) and the defendant group.
In line with the CJC report’s suggestion, we propose opting for the Bar Council version of fees for “liability and quantum” and “liability only” determinations but for the defendant suggestion for “quantum only”, which we believe better reflects the work involved in quantum only cases. These are as follows:
Evaluator Fees
Type Fee Liability and quantum £2,000 Liability only £1,500 Quantum only £750
Opting for the more generous Bar Council version, where more complex liability questions are at issue, recognises the novel nature of MNE in this area and seeks to be high enough to encourage barristers to take part.
To deter unnecessarily invoking the evaluation step (and therefore to encourage resolution at mandatory stocktake or earlier), we propose that in the event that the evaluator were to decide in favour of the claimant on liability, then the defendant should pay the entirety of the evaluator’s fees. Similarly, where quantum is at issue, if the claimant were to beat the defendant’s final (pre-evaluation) offer of damages, the defendant should pay the entirety of the evaluator’s fees. If the claimant were to lose on liability at evaluation or fail to beat the defendant’s final offer on quantum, evaluation costs should be shared equally between claimant and defendant.
For the avoidance of doubt, for claims within this FRC scheme, it will not be permissible for claimants to recover the cost of any portion of an ‘after the event’ insurance premium that relates to the cost of this type of evaluation. This is consistent with current practice on the recoverability of ‘after the event’ insurance premiums in clinical negligence cases, which is restricted to that part of a premium that relates to the cost of expert reports.
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Fixed recoverable costs in lower value clinical negligence claims: – a consultation
Implementation of the mandatory neutral evaluation stage
The proposal to incorporate a neutral evaluation stage into the FRC processes is a novel solution designed specifically for clinical negligence claims in order to encourage as many claims as possible to settle prior to proceedings being issued.
Prior to proposed implementation we would put in place a number of logistical arrangements to facilitate and evaluate the new system. We propose:
• establishing a dedicated panel of specialist barristers to call upon to conduct the evaluations. This will include eligibility criteria for inclusion on the panel
• putting in place a method of random selection from the panel to ensure selection is fair and minimises delays. One veto per party would be permitted
• agreeing criteria governing where evaluators can go beyond a paper-only evaluation to interrogate expert evidence in a limited set of circumstances
• putting in place mechanisms specifically to evaluate the effectiveness of MNE, including an assessment of the proportion of cases that settle at MNE, to be considered in the post-implementation review of the FRC scheme.