VULTURE LAWYERS BLEEDNHS FOR £418M
That’s their sickening fees in one year:enough to hire 19,000 nurses
GRASPING law firms charged a record £418million last year after pursuing cases of medical blunders against the NHS, a Mail on Sunday investigation reveals today.
And some greedy ‘ambulance chasers’ have been accused of pulling in ‘grossly inflated’ fees, many
times what their clients actually received in compensation.
Our inquiries also expose how law firms are apparently prepared to brazenly overcharge for their services while bringing complaints against the NHS. When challenged over the scale of their costs, firms have been forced to accept much smaller fees – sometimes less than half of their initial bill.
The revelations raise fresh concerns that the NHS is being bled dry by a compensation culture driven by opportunistic firms at a time when patients face ever-increasing waiting times for operations, overcrowded wards and difficulty in getting GP appointments.
The astonishing £418million bill – a 43 per cent rise on the previous year – would pay for 19,000 new nurses for the NHS, or 25,000 kidney transplants. The increase comes despite a Government pledge to crack down on ‘excessive costs’ charged by some solicitors.
In June last year, the then Health Minister Ben Gummer promised to cap the amounts law firms charged the NHS in cases where damages were under £100,000.
But new figures from the NHS Litigation Authority (NHSLA), which fights medical negligence cases, show the problem is getting worse – with some firms submitting huge fees for relatively minor matters.
While the legal costs of claimants have soared, the costs of defending the cases by the NHS has risen by only £17 million to £120million. Cases identified by The Mail on Sunday include:
A firm that tried to sting the NHS with a £25,000 bill for a pressure ulcer case that led to damages of just £1,000 – but ended up having its fee slashed by more than 80 per cent;
A second firm attempted to overcharge in a skin cancer case to the tune of £50,000 – submitting ‘disproportionate’ costs of almost £113,000;
A third case in which lawyers submitted a bill almost 50 times the £1,500 damages awarded to their patient, who had suffered a delayed diagnosis of a viral infection.
All three firms in the cases above – which have not been identified – had their fees cut by judges, according to information from the NHSLA.
Partners at top medical negligence firms typically earn six-figure salaries, while top earners can be paid more than £1million a year.
Last night a leading MP criticised law firms for seeking legal fees that were ‘grossly inflated and morally questionable’. And he warned that ballooning litigation costs risked making the NHS ‘unsustainable’.
But solicitors hit back, claiming the NHSLA frequently ramped up the costs of cases – wasting large amounts of taxpayers’ money – by ‘dragging its heels in admitting liability’. They said a considerable proportion of the costs they received went towards legitimate expenses, such as the costs of barristers and expert witnesses.
But the cases uncovered during our investigation paint a picture of exorbitant fees that dwarf actual damages received by patients.
In the pressure ulcer case involv- ing a woman in labour, a law firm successfully sued a hospital which admitted its failures. The woman was awarded £1,000 at Oldham County Court but her law firm then submitted a legal bill for £24,785, which NHSLA lawyers complained was ‘grossly disproportionate to the damages recovered and the matters in issue’. The court agreed, and slashed the fee to £4,546.
In the second case, lawyers for a skin cancer patient, who should have been diagnosed earlier, claimed £112,828 after obtaining £21,500 for their client. Their fee was cut by just over £50,000 to £62,500, after NHSLA lawyers again argued that the costs were disproportionate.
In the third case, solicitors for a woman who suffered after doctors failed to diagnose a viral infection put in a bill for £73,368 after she was awarded just £1,500 – a costs-to-damages ratio of almost 50:1. Their fee was halved to £37,500. Dr James Davies, Conservative MP for Vale of Clwyd and a member of the Commons Health Select Committee, said: ‘As a GP, I have direct experience of the spiralling costs of medical defence cover. Patients should have legal avenues open to them for true medical negligence, but some fees are grossly inflated and morally questionable.’
Official figures show that the total annual amount paid out by the NHSLA, including both legal fees
and damages, has trebled – from £456million in 2006-07 to just under £1.5billion in 2015-16.
Damages rose roughly in line, from £323 million to £950 million. But the yearly sum paid to patients’ lawyers rose five-fold from £83.3million to £418million.
And between 2014-15 and 2015-16 – the last financial year – these claimant costs jumped by £126million, according to the NHSLA’s annual report.
Costs and damages are funded by premiums paid to the NHSLA by hospitals, and they have risen steeply to cover the increases.
Ultimately, the sums are paid by the taxpayer.
Dr Davies warned: ‘The NHS faces numerous pressures and it can do without ever-increasing litigation costs. Unless this situation can be tackled, such costs risk making the NHS unsustainable.’
Last night, law firms came out fighting, accusing the NHSLA of wildly ramping up costs by fighting cases to the bitter end. And they claimed that figures issued by the authority were purposefully skewed to paint their companies in the worst possible light.
Paul Rumley, a medical negligence partner at Royds Withy King, which received £3.5 million in costs last year, said: ‘There are many occasions when the NHSLA has dragged its heels in admitting liability, causing costs to escalate unnecessarily. In one recent case, the NHSLA settled two weeks before it was due to go to court, when it could have done so at a much earlier date, saving time, money and heartache.’
And Stephen Webber, chairman of the Society of Clinical Injury Lawyers, said the NHSLA made patients who had experienced real harm suffer through its ‘culture of defend, deny and delay’.
He said: ‘In cases where the claimant is forced to issue court proceedings, the NHSLA loses 76 per cent of cases, which is complete madness and needs urgent investigation.
‘If the NHSLA admits liability where it has caused harm, the bills will be lower, but at present it sometimes takes years to force an admission of liability.’
Mr Webber, a partner at solicitors Hugh James, also argued that the £418million figure gave a ‘false picture’ as it included costs for cases not closed in 2015-16 – known as ‘payments on account’.
He said: ‘The NHSLA has included figures that should be in future years’ accounts. This is completely wrong and gives a false picture.
‘It is like saying my electricity bill has gone up this year because I have paid something towards next year’s bill.’
The narrower figure – for cases
‘Such costs risk making NHS unsustainable’
closed – has risen by a much more modest amount, from £249million in 2014-15 to £279million in 2015-16, NHSLA explanatory papers show.
The average legal cost per case actually fell slightly from 2014-15 to 2015-16, with the increase in the legal bill being due to the ‘greater number of cases’, Mr Webber said.
He agreed the MoS had identified some ‘serious examples where costs have been reduced by a judge’, but added: ‘The only such cases I have heard about relate to non-specialist solicitors, which shows the importance of specialist solicitors dealing with these cases.’
Nonetheless, figures reveal costs paid to patients’ legal teams have indeed rocketed – particularly for small-value cases. A decade ago, the average sum paid to a patient’s legal team, in cases where the damages were less than £10,000, was £13,535. By last year, that figure had more than doubled to £31,669.
Last year, Mr Gummer promised the Government would cap lawyers’ charges in cases where damages were less than £100,000.
He said some solicitors were ‘using patient claims to load grossly excessive costs on to the NHS’. In the future, he proposed, lawyers would receive fixed costs depending on the damages they secured.
The new system was due to come into force this month but has been delayed after an outcry by lawyers and patients’ groups, who say fixed costs will end up denying justice to those seeking important answers.
A consultation on the proposals is due to begin soon, said a Department of Health spokeswoman.
She added: ‘Safe, compassionate care is our priority and, to achieve this, the NHS must make sure every penny counts. Some lawyers have used claims to charge excessive costs to the NHS – in some cases more than the patient receives in compensation, and this can’t be right. Proposals are under way to cap excessive legal fees in clinical negligence claims, which will reduce clinical negligence costs.’
But Mr Webber responded: ‘The Government’s focus should be on avoiding negligent treatment. If the negligence is stamped out, then there will be no legal bill to pay.’
IMAGINE how many more operations could take place on time, and how many more nurses and doctors could be hired or trained, if the NHS were suddenly given an extra £1.49billion a year. This is big money by any standard.
Yet at the moment this fast-increasing sum is taken from taxpayers annually to pay for no-win, no-fee lawsuits. Of course some of this money is genuine compensation paid to people who have been let down by doctors. But a huge share of it is creamed off by the lawyers themselves, or soaked up by the Health Service’s efforts to challenge excessive fees.
Such lawsuits have become a national disease, hampering almost every legitimate activity with risk assessments and insurance costs.
They have plagued the United States for decades but were largely unknown here until the passage in 1995 of the Conditional Fee Agreements Regulations.
This change, aimed to take the pressure off legal aid, was well-meant. But it has instead increased the cost of almost everything else.
It is surely time for a thoughtful government to take a fresh look at the rules.