In September last year, the Government announced that it would introduce fixed recoverable costs (FRC), a new streamlined process for clinical negligence claims with a damages value of £1,501 to £25,000 in England and Wales. The objectives of the scheme are to create a faster, fairer and more cost-effective system that benefits both claimants and defendants in a claim and to subsequently reduce the costs to the NHS.
The rising cost of clinical negligence claims has been unsustainable and has taken much-needed resources from the NHS. The 2023–24 annual report by NHS Resolution revealed a significant increase in claimant legal costs – rising by 11% to £545.3m – showing how needed this change is.
It was noted that claimant costs for low-value clinical negligence cases had doubled to circa £23,200 per case, rendering legal costs disproportionate in comparison to the levels of compensation. Accordingly, the driving force behind the Lower Damages Clinical Negligence FRC Scheme (LDFRC) was to strip out a layer of costs incurred in clinical negligence claims through the implementation of the new protocol, titled the Pre-Action Protocol for the Resolution of (Low Value) Clinical Disputes (LVCD Protocol).
While previous efforts to implement FRC for lower-value clinical negligence claims were derailed by the 2019 general election, the consultation in April 2022 (which concluded in September 2023) set out the intention for the LDFRC to be implemented by 1 October 2023, with the scheme to be introduced alongside the MoJ’s FRC reforms for the fast track and intermediate track regime for higher value cases. However, due to further delays caused by the ongoing consultation into disbursements for clinical negligence claims, the intention now is to finalise the CPR amendments and officially implement the regime (most likely by spring 2025).
The FRC scheme sets pre-determined costs that can be recovered by claimants in clinical negligence cases, based on the value of the claim and its complexity. The scheme particularly targets the fast track, which applies to cases valued at up to £25,000.
Fast track cases are typically straightforward, with a one-day trial limit and restricted use of expert evidence (one expert per party in any field). By capping legal fees in this category, the FRC framework seeks to make litigation more efficient and to reduce the incentives for excessive legal costs in cases where damages are relatively low.
The intermediate track covers most matters of modest complexity and a value of between £25,000 and £100,000, which can be tried in three days or less, with no more than two expert witnesses giving oral evidence on each side and where the case can be managed under an expedited procedure. More complex cases will be allocated to the multi-track. Fixed costs under the fast and intermediate tracks are detailed in the Civil Procedure Rules 45.43 to 45.51.
The introduction of the FRC scheme is expected to fundamentally alter the landscape for defending clinical negligence claims. The FRC regime is expected to introduce greater predictability and control over legal costs, providing significant benefits for defendant solicitors representing healthcare providers like the NHS.
In the past, protracted legal disputes over low-value claims could result in disproportionate costs relative to the damages awarded. The fixed cost structure is expected to change this dynamic, encouraging faster resolution and earlier admissions of liability where appropriate.
Whereas current pre-FRC strategies often involved more extensive preparation for potential litigation, the new system is expected to promote early settlements. For example, the current pre-FRC regime entails a more aggressive claimant strategy – through comprehensive pre-action letters of claim, the need for expert evidence and defence solicitors having to consult with counsel to prepare responses and negotiation preparations. Once the new FRC rules are in place, the intention is for more predictability with defendant solicitors able to more readily advise their clients to make early admissions on breach of duty and causation, while claimant’s solicitors are expected to cease making unnecessary requests, avoiding drawn-out legal battles and inflated costs.
Defendant solicitors should be able to provide more focused advice on cost-risk analysis under the new rules. With fixed recoverable costs in place, our ability to predict the financial outcomes of a case should improve, leading to clearer guidance for healthcare providers. Claimants should then be more inclined to settle claims earlier when liability is evident, knowing the financial exposure is capped and predictable. This should avoid the spiralling legal fees that previously deterred earlier admissions or settlements in clinical negligence claims.
The introduction of FRC should lead to a more collaborative approach between defendant solicitors and their clients. Clear communication on potential legal costs is expected to improve decision-making in litigation, with a focus on minimising unnecessary legal expenses and resolving disputes more efficiently.
Overall, the introduction of FRC is expected to create a more proportionate and predictable litigation process. Defendant solicitors expect to be able to better advise their clients on the likely outlay for both damages and costs, ensuring a clearer understanding of the risks involved in defending claims. The FRC regime also is expected to contribute to a more straightforward settlement strategy, promoting early resolutions where liability is clear and allowing the NHS to focus its resources on patient care.
Overall, while the LDFRC Scheme has been delayed, the expectation is for the CPRC to schedule the new rules to be in force by spring 2025. The proposals aim to provide faster resolution of cases and legal costs that are proportionate to the value of compensation. The introduction of fixed recoverable costs in clinical negligence claims is expected to reshape the legal framework for defendant solicitors. By promoting efficiency, cost-effectiveness, and early settlements, the FRC regime should create a more sustainable process for resolving low-value claims.
While there are always challenges with the introduction of a new regime, the overall impact is expected to be streamlining of litigation, reduction of unnecessary legal expenses, and better protection of NHS resources. Defendant solicitors should be better equipped to offer clear, predictable advice to their clients, helping to manage the costs of clinical negligence claims while ensuring that healthcare providers can continue to prioritise patient care.
For more information, please contact:
Kate Christopher - Healthcare Complex Paralegal
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