Other potential difficulties
95. The Explanatory Note to the NHS Redress Bill
[Lords] suggests that the annual cost of administering the Redress
Scheme would be between £3.2 and £11.2m.[84]
There is a concern that the saving of costs on private legal
representation may simply be matched by the increased costs of
an administrative system supplemented by private legal representation.
In a written submission, the Medical Defence Union, a provider
of medico-legal services to doctors and dentists including indemnity
insurance policies, indicated that:
The NHLSA's most recent accounts show that compensation
payments for 2004/5 were £502 million and that liability
for known and incurred but not reported clinical negligence could
potentially amount to £6.8bn. In our experience about 2/3
of total liability for clinical negligence resides in a small
number of large claims in which as much as 75% of the damages
may be awarded for future care.[85]
96. If this is, in fact, the case, then it is difficult
to see how the Redress Scheme will make a difference to overall
costs, since it would not (at least initially) apply to claims
deemed to be worth more than £20,000. In those circumstances,
it would only have an effect if it is subsequently extended to
all claims against the NHS. When we put this question to the Minister,
she said:
One of the beauties of doing regulation by secondary
level legislation which we do in Parliament - which when you are
in government you love, when you are not in government, you get
very frustrated by - is that you can quickly and relatively easily
make amendments of that kind to legislation of this nature, so
we think that we will be able to do that because of the way we
set up the legislation.[86]
This "flexibility" is unlikely to promote
confidence in the scheme.
97. We were particularly surprised that if a claim
made under the Redress Scheme subsequently turns out to exceed
£20,000 it will be rejected.[87]
This appears to us to be a potential waste of resources if both
the claimant and the NHS Litigation Authority are happy to continue
under the scheme.
98. An additional problem may be that people who
do not qualify for legal aid would be more likely to pursue compensation
under the Redress Scheme. At present, eligible claimants may obtain
legal aid for clinical negligence claims but for those outside
legal aid it is difficult to bring medical negligence cases under
a CFA since the costs are typically much higher and there are
frequently higher risk variables.
99. In oral evidence, the NHS Litigation Authority
stated that they had run a scheme similar to the one that was
envisaged by the Department of Health, which they referred to
as a 'pilot'. Drawing on the evidence from that scheme, it became
evident to the NHS Litigation Authority that most of the claimants
under the 'pilot' were people who would not have claimed under
the existing process. Stephen Walker commented that:
Under our pilot we believe that almost all the
claims were claims which would not have been made but for the
existence of the scheme. We were told both by the independent
assessor who looked at the scheme only halfway through - he did
not look at the very end for various reasons - that was the case,
but I was also personally told, and I believe John [another witness
who appeared on behalf of NHSLA] was too, by quite a number of
claimant solicitors, that they used the scheme for cases that
they would not otherwise have (to use their phrase) "bothered
with" probably for economic reasons. I think it is probable
that we will see more claimants, and that comes to the issue of
striking a balance between on the one hand providing access to
justice for damaged patients, because no-one will be paid unless
they establish a legal liability, and on the other hand cost.
That is always a balancing exercise. Fortunately, it is one for
the Department, not for my organisation, but, yes, there is always
a risk that if you help people to gain access to justice it might
cost you money.[88]
100. We put it to both Stephen Walker and the Minister
of State that, given these potential difficulties, there could
be substantial benefits in running a proper pilot, followed by
a comprehensive assessment by the Department. Stephen Walker set
out his views of the benefits and challenges of running such a
pilot:
There are pros and cons. It is awfully difficult,
setting up pilots, to mimic wider scale practice. Do we pick a
Strategic Health Authority and do it there, or do we say a fixed
time, do we say everything that comes through the door next month,
whatever it may be. How do we monitor it? None of this comes resource
free either, of course, and so the debate continues […] The
pros would be that we might learn more lessons about how best
to do it and whether or not we are able to set realistic targets,
whether we can garner enough independent experts who are prepared
to react very quickly for us at fixed fees, whether or not the
legal profession is prepared to support this.[89]
101. The Minister of State was "relaxed"
about the potential cost implications, which she stated could
equate to £48m in the first year and rejected the idea of
a pilot or even a system of targets.[90]
The explanatory note to the Bill suggested that "Departmental
modelling suggests that the projected financial effect in year
ten of the scheme's operation would range between a saving of
£15m (if there were only small increases in Redress claims)
and an increased cost of an extra £80m (if there were large
increases in Redress claims)."[91]
102. We are concerned about this approach. Both the
Minister of State and Stephen Walker referred to a previous pilot
offering free independent legal advice to claimants which had
been conducted by the NHS Litigation Authority, but that 'pilot'
had not been publicised. Stephen Walker admitted that it had not
been independently assessed throughout. It is impossible to see
how the Department could accurately forecast the potential demand
for the Redress scheme on the basis of the evidence we heard.
103. Given the
particular concerns which have been expressed about the potential
expenditure and difficulties inherent in the Redress Scheme, it
is essential that it is piloted, and that the pilot be comprehensively
assessed, to ensure that the benefits that it will bring are sufficient
to outweigh the costs. We are alarmed that the Department of Health
is "relaxed" about the possible cost implications of
the scheme, since we believe that it is difficult to forecast
the potential demand accurately.
104. The Government
has modified the proposals for a redress scheme and restricted
the scheme to low value cases. There is a danger that the scheme
will not be cost-effective. Some of the objectives which the Government
has set out for the scheme could be achieved by other means, such
as more open and transparent handling of claims and the willingness
to admit mistakes of health professionals on a more extensive
basis than has previously been the case in the Health Service.
Another concern is that claimants may be ineligible for legal
aid if they fail to use the Redress Scheme.[92]
This would arise if it became a requirement for obtaining Legal
Aid that the scheme be used first. The impact of this would be
greater if, as seems possible, the threshold of £20,000 were
to be increased in the future. Where so much is to be done by
secondary legislation, it is unfortunate that such issues have
not been adequately addressed in the main body of the Bill.
Care contracts
105. During the course of the inquiry, the Committee
attempted to take detailed evidence on the issue of care contracts.
Because of the lack of detail in the Government's proposals, this
proved difficult. Oral evidence from District Judge Oldham[93]
and Stephen Worthington, Vice Chairman of the Bar Law Reform Committee[94]
suggested that judges and barristers are becoming more involved
in long term care issues through the introduction of the periodic
payments system. However, we were told by Anna Rowland, Policy
Manager for Civil and Family Justice at the Law Society, that
from her perspective there had been no discussion of the detail
of care contracts.[95]
We believe that relatively little attention has been paid to this
area, although we accept that this is likely to be because the
threshold of £20,000 proposed under the Redress scheme would
not generally affect those people who had sustained serious injury
requiring long term care.
106. Care contracts remain an important issue. The
Department of Health Statement of Policy on NHS Redress raises
some questions about the Care Contract proposal. In particular,
paragraph 38 states that the overall limit of £20,000 will
not include the cost of remedial care. This suggests that care
contracts may be relevant in more serious cases involving for
example, the elderly, where the award of general damages may be
low, there may be limited financial loss but there will be costly
remedial care. On the other hand, paragraph 52 states that 'It
is not intended that offers of redress will include care or treatment
wider than clinical care'. This implies that care contracts will
not have a major role to play in the rehabilitation agenda. The
exclusion of rehabilitative and social care may be regarded as
unfortunate in the light of evidence from Nick Starling, Director
of General Insurance, that rehabilitation services are not as
developed as they should be[96]
and that an impetus from government and the health service is
required.[97]
107. Paragraph 35 of the Policy Statement indicates
that the care may be provided or commissioned by a scheme member.
This raises a question about the role of private health care providers
under the scheme. At present accident victims may claim the expenses
of private health care as s2(4) of the Law Reform ( Personal Injuries)
Act 1948 - which applies to personal injuries cases only - provides
that in determining whether medical expenses are reasonable, the
possibility of avoiding such expenses by making use of the NHS
is to be disregarded. It seems implicit in the Redress proposal
that the right to claim private remedial treatment may be indirectly
removed by an offer of a care contract. If this is the case, the
issue should be fully debated since claimants may not wish to
be treated by the same health professionals who caused the original
injury.
108. One final issue was whether the care contract
principle is one which could eventually apply much more widely
and could replace the granting of large capital sums to people
who are very seriously injured. In the light of the written evidence
of the Medical Defence Union (its 2001 response to the Clinical
Negligence consultation) that £1bn of the NHS's £3.9bn
liability as of 2000 could be redirected to the NHS if care contracts
replaced awards of damages, this question merits further consideration.
109. The Minister noted that she recognised that
up to a quarter of NHS liability payments are spent on remedial
care and that she was keen to make more use of care contracts.[98]
110. We recommend
that further consideration be given to the proposal in clause
3(3) (a)of the NHS Redress Bill [Lords] to offer a 'contract to
provide care or treatment' as part of the Redress scheme. On the
basis of the evidence that we have received, we believe that relatively
little attention has been paid to this area of reform, although
we accept that this may be because the relatively low threshold
of £20,000 means that patients in need of a significant period
of remedial care are unlikely to be affected by the Redress Scheme.
76 Explanatory Note to the NHS Redress Bill Back
77
Ev 105, para 2 Back
78
ibid, para 3 Back
79
Ev 70 Back
80
Q83 Back
81
Qq285, 288 Back
82
Q228 Back
83
Q300 Back
84
Explanatory note to the NHS Redress Bill, Financial Effects Back
85
Ev 121, para 8 Back
86
Q299 Back
87
Q289 Back
88
Q220 Back
89
Qq216-218; following the conclusion of our oral evidence, the
Committee received a memorandum from Mr Brian Raincock, the managing
director of Resolve Services Limited (Ev 127-128). He raised a
number of serious allegations about the evidence of Stephen Walker.
He stated that the RESOLVE pilot was designed, organised and run
by Resolve Services Ltd (RSL) "with the reluctant co-operation
of the Chief Executive of the NHSLA", and went on to add,
inter alia, that it was RSL, rather than the NHSLA who
had set the six month target for claims resolution, that "the
relationship with the independent experts was established by RSL,
[…] and the fact that it worked had nothing whatsoever to
do with the NHSLA". These allegations did not affect our
conclusion on the matter of establishing a pilot (below), although
they challenge the accuracy of some of the evidence we received
from NHSLA Back
90
Qq291, 296 and 297 Back
91
Explanatory note to the NHS Redress Bill, Financial Effects Back
92
We did not receive a satisfactory response from LSC on this when
we asked them; see Constitutional Affairs Committee, Oral evidence,
14 February 2006, HC 919-i, Qq76-78 Back
93
Q51 Back
94
Q106 Back
95
Q85 Back
96
Q134 Back
97
Q122 Back
98
Qq304-305 Back
