Abstract
Observant readers may have spotted that the annual report and accounts of the NHS Litigation Authority (NHSLA) for 2007–2008 were published in the summer. Apart from the inevitable concentration on indexation and the likely financial implications of the Court of Appeal's ruling, which this column has already covered, there is one particularly worrying statistic: for claims closed during the financial year, the NHSLA paid no less than £90.7 million in Claimant costs on clinical negligence cases compared with £83.3 million in 2006–2007, and just £43.3 million for Defence costs.
The probable chief reason for this is not difficult to determine: a significant increase in the proportion of clinical negligence claims brought with the aid of Conditional Fee (or ‘no win, no fee’) Agreements (CFA). By taking the risk of not being paid at all if the case fails, Claimants’ solicitors can add a mark-up of as much as 100% to their usual hourly rates. For firms in the City of London, this can result in attempts to claim well over £600 per hour from the NHS, which many would regard as scandalous. It is, however, perfectly legal under current arrangements.
Now that some large Claimant firms are bringing 50% or more of their clinical cases under CFAs, the question must be asked whether such arrangements truly serve the overall public good.
On the other hand, numbers of new clinical negligence claims received by the NHSLA have been remarkably steady over the past few years: 4677 in 2005–2006; 4674 in 2006–2007 and 4593 in 2007–2008. This fact may be a reflection of the stringent risk assessment criteria applied by legal practices before agreeing to take on a case under a CFA. The prospect of receiving no fee at all on a losing case concentrates solicitors’ minds and means that weaker claims are weeded out at an earlier stage than before. For that reason, if for no other, CFAs are not wholly undesirable from a Defendant's perspective.