Legal Aid, Sentencing and Punishment of Offenders Bill

Lord Lloyd of Berwick Excerpts

Wednesday 7th March 2012 Lords Chamber

Moved by

[Lord Lloyd of Berwick]

13: Schedule 1, page 125, line 5, at end insert—
“Clinical negligence(1) Civil legal services provided in relation to the obtaining of one or more expert reports in clinical negligence proceedings.
(2) In this paragraph—
“clinical negligence proceedings” means proceedings which include a claim for damages in respect of clinical negligence;
“clinical negligence” means breach of a duty of care or trespass to the person committed in the course of the provision of clinical or medical services (including dental or nursing services);
“expert report” means a report by a person qualified to give expert advice on all or most of the matters that are the subject of the report;
“proceedings” includes any sort of proceedings for resolving disputes (and not just proceedings in court), whether commenced or contemplated.”

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[Lord Lloyd of Berwick]

My Lords, we come to the first of a group of amendments dealing with clinical negligence. The noble Lord, Lord Phillips of Sudbury, has asked that his Amendment 101A be degrouped, and I ask the same in respect of my Amendment 137. Amendment 15, in the name of my noble friend Lady Grey-Thompson, should cover clinical negligence as a whole. My amendment covers only the cost of expert reports, which, as one noble Lord said in Committee, is the very least that should be covered by legal aid. If my amendment succeeds, it will not in any way pre-empt Amendment 15. If that amendment then succeeds, as I hope it will, then my amendment will lapse at Third Reading.

The difference between this amendment and many that have been debated in Committee—and, indeed, so far on Report—is that it will actually save money. The question is this: what is the best way of funding expert reports in clinical negligence cases? Unlike the previous amendment, that question is not likely to give rise to any great emotion. The method proposed by the Government in Clause 45 would cost between £16.8 million and £25 million. The cost of doing exactly the same under legal aid would be between £6.3 million and £6.9 million. If those figures are correct, as I believe them to be, that in itself should be enough to commend the amendment to the Minister.

I will come back to justify those figures a little later, but first I need to say a little about the background. As I am sure noble Lords know, clinical negligence claims are funded in two ways: legal aid or conditional fee agreements supplemented, in a majority of cases, by “after the event” insurance, the purpose of such insurance being to protect the plaintiff against an adverse order for costs. Under the current law, the premium charged by ATE insurers is recoverable from the defendants, usually the National Health Service, even if the plaintiff loses. That system was introduced by Section 29 of the Access to Justice Act 1999.

The Government then listened to concerns. It is perhaps best that I should describe those concerns in the words of Mr Jonathan Djanogly in the other place. Referring to expert reports, he said:

“Such reports, which can be expensive, are often necessary in establishing whether there is a case for commencing proceedings, which raises particular issues if recoverability of ATE insurance is abolished. In responding to these concerns, clause 43”—

as it then was—

“provides, by way of exception, for the recoverability of premiums in respect of ATE insurance taken out to cover the cost of expert reports in clinical negligence cases”.—[Official Report, Commons, 2/11/11; col. 1027.]

If we will not cover clinical negligence as a whole, as my noble friend Lady Grey-Thompson would wish, we all agree that at the very least we should cover in one way or another the cost of expert reports. To that extent, Mr Djanogly was absolutely right. The trouble is that he has chosen the wrong way to set about it.

Lord Justice Jackson, in his lecture in Cambridge in September 2011, described the Government’s proposals in Clause 45 as,

“the most expensive and inefficient mechanism which it could be possible to devise in order to achieve”,

the Government’s objective. It is easy to see why he used such language. One has only to look at new subsections (2) to (4) in Clause 45. They require yet more regulations to be made by the Lord Chancellor, at the very time when we are trying to reduce the burden of regulations in civil litigation. The regulations are bound to be complex. If the maximum of the relevant part of the premium, as it is called, is too high, the regulations will not achieve their objective. On the other hand, if it is set too low the insurers are sure to find one way or another around it. It is surely much better, and certainly much simpler, to cover the cost of expert reports by the well worn path of legal aid.

I find it difficult to see why the Government have chosen not only the most complicated way of achieving their objective but the most expensive, which brings me back to the figures. In Committee, I put forward a simple calculation on instructions, as lawyers say. I took £5,000 as the average cost of reports in clinical negligence cases. If you assume that the plaintiff has a 50:50 chance of success, the insurer must charge at least £5,000 if he is to break even. To that he must add something to cover his overheads and profit. The figure that is usually taken for that purpose is 25 per cent, so the premium will not be less than £6,250. If you then assume that ATE insurance was used in half the cases settled by the National Health Service in 2010-11, you simply multiply £6,250 by 2,700 and get a figure of £16.9 million paid out by the NHS. It is as simple as that. Compare that to the £6.3 million to £6.9 million spent on achieving the same result by legal aid.

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[Lord Wallace of Tankerness]

It is very evident. We want to encourage joint expert reports, but clearly there will be cases when that is not possible because there is a division of opinion. In our debates on Monday evening, the noble and learned Baroness, Lady Butler-Sloss, indicated some of the very conflicting expert reports in cases she had heard about shaken baby syndrome. That is not clinical negligence, but it is clearly an example of conflicting reports. Nevertheless, where it is possible to go towards joint expert reports, it should be encouraged.

My noble friend Lord Thomas of Gresford also quite properly drew attention to the fact that while we have quite rightly focused on some of the very serious cases and consequences of clinical negligence, in many cases of clinical negligence the damages could be under £20,000. Your Lordships may be aware that the Government have recently announced the extension of the low-value claims process for personal injury claims. We are working closely with the National Health Service Litigation Authority and claimant lawyer representatives to set up a pilot for dealing with low-value clinical negligence cases. These discussions are ongoing. They will be a valuable way of trying to identify ways in which some of the lower value cases can be dealt with.

My noble friend drew the attention of your Lordships’ House to the scheme in Wales under the NHS Redress Act 2006. Clearly that is something we would look at, although I note that it is tied in with a complaints and concerns regime and does not necessarily replace the existing judicial system. Claimants are still free to pursue a claim. I have always thought that it is one of the strengths of devolution that different ways are found in different parts of our United Kingdom to address issues such as this. It is only right that we look at the experience in different parts of the United Kingdom, and if there is something to learn we should be willing to learn it.

I am obliged to refer to government Amendments 26 to 30 and 58 to 67. They are technical in nature. My noble friend Lord McNally has written to all Peers describing their detail, so I do not propose to detain the House further.

We have listened to very strong representations in earlier debates about clinical negligence in the context of perinatal and neonatal cases. We have sought to address it through conditional fee agreements, which are increasingly part of the way in which clinical negligence cases are dealt with, and through the exceptional funding. We are ensuring that there is provision in other cases. As I have indicated, I regret that we have not been able to have a meeting of minds with the noble and learned Lord, Lord Lloyd of Berwick. I will place the Ministry of Justice’s calculations in the Library of your Lordships’ House. When those who wish to look at them have done the calculations and wish to come back to us, we will seek to give them a response. In these circumstances, I ask the noble and learned Lord to consider withdrawing his amendment.

[Lord Lloyd of Berwick]

My Lords, I address only my own amendment. It is very limited in scope and is designed to save money. I am very grateful for the support of the noble Lords, Lord Wigley, Lord Newton and Lord Faulks, the noble Baronesses, Lady Mallalieu and Lady Finlay, and other noble Lords. It seems to me that they have demonstrated conclusively that the financial argument in favour of this amendment is irresistible. It is simply not good enough for the Minister to say by way of answer that we must agree to differ on the figures. The figures supporting the case that I have put forward were put before the Government on 2 March. Indeed, they have had similar figures since we were in Committee, but they have not answered these and it is now 7 March.

If the Government are as serious as they keep on saying they are about saving money, they ought to accept this amendment. Even on their own figures, they would save £6.2 million. I wish to test the opinion of the House.