Conditional fees work well enough for personal injury cases but there are fears that they will deter many from pursuing medical negligence claims. John Peysner is a solicitor and a principal research fellow at the Nottingham Law School at Nottingham Trent University. John Peysner explains why.
Your editorial, "Taking a risk by being positive" (The Lawyer, 2 December), raises important issues for lawyers and insurers facing up to the challenge of conditional fees and the proposed withdrawal of legal aid from civil money disputes.
In personal injury litigation a combination of cheap, readily available insurance and benign substantive law make the task of risk assessment practicable. Here, conditional fees appear to have been a success, although doubts remain as to lawyers' capacity to assess the resource implications of taking cases on and the level of the success fee.
In insolvency, where both law and facts can be uncertain, conditional fees have not taken off. This suggests that there will be considerable difficulties in their extension into civil money claims.
A particular concern is the impact of the charges in another area: medical negligence litigation. This area of work has expanded rapidly over the past few years and plaintiffs have relied on legal aid. The reasons for this expansion are complex and include an increase in assertiveness among patients, a demand for openness and explanations from health professionals, and an escalation in the number of treatment episodes. It is inevitable that, in a complex healthcare system such as the NHS, mistakes will be made which require investigation and, in appropriate cases, compensation.
The Government is now committed to withdrawing legal aid from this work, and it suggests that conditional fees and insurance will fill the gap. Is this analysis correct and, if not, should the public be concerned?
Sir Peter Middleton, in his recent cost-benefit report to the Lord Chancellor, points out that the resources for medical negligence come largely from health and legal aid budgets in the same cash-strapped public sector. He suggests, among other alternatives, that a no-fault arrangement might be more effective.
Unfortunately, the New Zealand experience of such a scheme is not reassuring: compensation payments were slashed by a recent administration and lawyers are mired in arguments about causation, with consequent increases in cost. Could the apparent contradiction of all the money coming out of one pot be solved, at a stroke, by removing the right to compensation for the negligently injured patient?
As this would then produce the ridiculous result that a patient could recover damages for the road accident, which puts him or her into hospital – with a lawyer working on a conditional fee agreement – but be denied compensation for consequent medical errors leading to more serious injuries, we must go back to the drawing board.
If legal aid is not going to be available, can conditional fees fill the gap? Medical negligence cases always start with an investigation phase: obtaining a complete set of medical records and experts reports.
Without this information a lawyer, no matter how skilled, cannot assess if there is a reasonable case and, if appropriate, offer a conditional fee arrangement and arrange suitable insurance cover. The cost of this initial exploration may run into several thousand pounds. Poor clients will not be able to pay and many middle-income earners cannot afford to speculate.
Unless there is some external support for these early steps, access to justice for injured patients will simply disappear. The logical approach is for the Legal Aid Board (LAB) to continue to fund the investigation stage. The LAB should go further and extend its support beyond current eligibility to include most earners; after all, it is not just the poor who suffer medical accidents.
The statutory charge will continue to protect the fund to an extent and, in return for the LAB's support, lawyers and experts should be prepared to do the initial work for modest lump sums in order to generate potential cases for viable risk assessment.
This economical approach to investigation should be matched by lower costs for smaller cases – possibly the fixed party and part regime pioneered by the Birmingham medical negligence pilot scheme – and a restriction of public support to specialised lawyers who have already demonstrated their competency.
All these changes will encourage the expansion of after the event insurance products at affordable premiums and access should be increased: a virtuous circle can be achieved.