The former NHSLA has published its first business plan under its new name, NHS Resolution. The 2017/2018 plan re-launches the Special Health Authority that was formerly responsible for defending and indemnifying legal claims brought against the NHS, as it shifts its stated focus from litigation to resolution.
The plan aims to align the former NHSLA’s purpose with Department of Health objectives to increase patient safety by learning from harm. NHS Resolution’s stated purpose is “to provide expertise to the NHS on resolving concerns fairly, share learning for improvement and preserve resources for patient care.” It is now committed to adopting “a different approach to delivering compensation and a shift upstream to support candour and learning to address the rising costs of harm in the NHS.”
The rising cost of clinical negligence is undoubtedly the primary driver for the change. NHS Resolution tells us that both the frequency and severity of claims are rising, with failings in maternity care giving the greatest cause for concern. NHS Resolution’s new notification team for maternity incidents will become involved at local level at the earliest post-incident opportunity, to provide support to families and staff, ensure that opportunities to learn are not lost and capture data that can be used to incentivise better outcomes in future. The aim is to use early intervention and alternative dispute resolution to resolve claims in a more efficient and less adversarial way, with less involvement from the patient’s own lawyer. The NHSLA claims, somewhat sweepingly, to have halved the potential cost of claims in 2016/2017 through its intervention, an estimate based on their own damages and costs reserves figures when compared with settled and otherwise concluded cases. Clearly, it is their belief that their institutional NHS clients benefit from experienced representation. We believe our severely injured claimants are entitled to the same.
NHS Resolution’s vision is that by extending their reach “upstream” to the immediate aftermath of the injury, they will be able to use their expertise to ensure that disputes are resolved in an open culture that promotes learning within an environment in which the injured person, their family and healthcare staff are all supported. At the outset, however, they make it clear that their remit is financial; “The financial challenges currently facing the NHS mean that we must take every opportunity to save money and remove unnecessary expenditure. We must continue to apply our expertise to add value in areas which would see significant cost without our involvement and look for opportunities to increase the impact we have.”
The Department of Health has reiterated the need to reduce the cost of claims to preserve resources for patient care during its recent moves to regain control of the rising costs of clinical negligence. In each case, despite the emphasis on reducing litigation costs, the problem remains that when patients suffer injury as a result of negligent care they are entitled to be compensated. That inevitably has a cost. The only sure way to reduce the cost of claims is to improve standards of healthcare and reduce the incidence of harm. Experience from other countries has shown that creation of an open, learning culture within the NHS is fundamental if incidents of avoidable, compensatable harm are to be reduced. Given the current cultural and financial difficulties faced by the NHS, it is hard to see how that will happen.
I commented in a previous post about the DoHs’ consultation on its proposed ‘safe space’ protection for healthcare staff in healthcare safety investigations. My concerns about the diminution of patients’ rights were echoed in the outcome of that consultation which acknowledged that from complaint handling experience to date, neither patients nor staff deemed the NHS trustworthy enough to use new safe space powers responsibly.
We are still awaiting the outcome of the Department of Health’s consultation on a proposed Rapid Resolution and Redress Scheme for avoidable birth injury. Here, again, any eventual reduction in claims seems totally dependent on the DoH’s vision of an open, learning culture that the NHS will find so hard to create. In the short term, under a new scheme, the sums don’t add up. Add to that the NHS’s ongoing responsibility to meet its lifelong periodical payment orders and there seems little hope of a decline in claims or costs.
NHS Resolution plans to tackle this problem by timely intervention to ensure efficient alternative resolution of claims. It will provide local training on effective delivery of candour, use innovative technology for data gathering and create a ‘faculty of learning’ to share what it has learned. Using its weight as well as its expertise, NHS Resolution will incentivise safety improvements with indemnity schemes used as both a platform for learning and a lever for change.
It might well be possible to reduce the number of ‘frustration claims’ – one of the objectives of the 2017/18 plan. Poor complaint handling, withholding of information, half-truths and administrative delays are often the reason that a mildly injured and otherwise non-litigious patient is driven to seek advice from a solicitor. But even the most forgiving of claimants must seek redress where their injury has led to permanent disability resulting in loss of earnings, the need for specialist equipment and life-long care. They have long needed early and open communication and proper support in the aftermath of an avoidable injury, and they will always benefit from specialist representation, a basic right which must not be overlooked in the furore about cost. A large proportion of the cost of clinical negligence claims would be reduced by early admissions of both liability and causation. All too often we still receive last minute admissions in the weeks leading up to trial.
Meanwhile the incidence of avoidable harm remains unacceptably high with the personal, emotional and physical cost to each injured family far outweighing any financial compensation award. In setting out its stall to achieve early, supportive and cost effective resolution to the emotive circumstances which follow a serious injury, along with learning and improvement for the future, NHS Resolution has set itself an unenviable task.
In my last post I commented on the Ministry of Justice’s recent consultation paper, The Personal Injury Discount Rate: How Should It Be Set In Future?
I expressed my concerns about the Ministry of Justice’s attempt to circumvent the financial implications of its legal obligation to lower the discount rate. The long awaited reduction increased damages for future loss, reflecting the difficulties faced by claimants in meeting rising costs with poor investment returns from low interest rates.
The problem remains that however careful the methodology for calculating future loss, lump sum compensation awards are based on estimates of the claimant’s longevity, future needs and care costs. The complex calculation uses life expectation and interest rates to predict how much compensation the claimant will need for their entire life. The aim of this process is to come up with a figure which will neither under-compensate nor over-compensate the claimant.
A totally dependent, severely disabled claimant’s compensation must provide a lifetime’s worth of nursing care, essential therapies, assistive technology, adapted housing and the specialist equipment required to put them (in so far as money can do so) back in the position that they would have been but for the negligence which caused their injury. In theory it should run out on the day the claimant dies having paid for all their needs arising from the defendant’s negligence. In practice it rarely happens that way. The claimant will either run out of money whilst still alive or die with money left unspent, either from premature death or because they deprived themselves of appropriate care to the make the money last.
Is there a better way? The consultation paper raises a secondary question of periodical payment orders (PPOs). Whilst only indirectly related to the discount rate, PPOs are directly relevant to any debate about the best way to ensure lifelong compensatory provision for severely injured claimants.
PPOs are not new. At Boyes Turner we have been using them in appropriate cases since their introduction in the 1990s. The difference with PPOs is in the structure of the compensation award, which is why they are sometimes referred to as ‘structured settlements’. A PPO requires the defendant to pay the claimant a regular income, at a pre-determined, agreed rate, for the remainder of the claimant’s life. The payments are based on the medical and care experts’ assessment of the claimant’s current and future needs. Stepped PPOs include scheduled increases in the payments at pre-set future dates to cater for life changes requiring different levels of care. PPO payments can be inflation-proofed by linking them to the Retail Prices Index (RPI) or Annual Survey of Hours and Earnings (ASHE).
There are several benefits to PPOs:
Given these benefits to claimants and the potential attraction to defendants of moving away from increasingly expensive reliance on the discount rate, the Ministry of Justice asks in the consultation why more claims are not settled in periodical payment form.
Disadvantages of PPOs
In maximum severity clinical negligence cases the major disadvantage of a PPO is that it limits the claimant’s flexibility as to how their money is spent. PPOs provide claimants with a regular income based on the future costs aspect of their claim, however, in order to put the claimant back in the position that they would have been but for the negligence, it may be necessary to make expensive one-off purchases.[Kate – please link here to http://www.cerebralpalsy-lawyers.co.uk/our-cases/cerebral-palsy-claims/cerebral-palsy] Most commonly, where a claimant needs a larger, adapted house as a result of their injury, only a proportion of the additional purchase costs, along with essential adaptations, will be covered by the claim. In practice, most claimants also need a lump sum payment so that they can use capital from other aspects of their claim to cover the capital cost of buying a larger house. Where a claim has been discounted to reflect litigation risks on liability or the claimant’s life expectation is very short, it may not be in the claimant’s interests to agree to settlement by way of a PPO.
The courts can order PPOs but in practice they tend to approve PPOS agreed between the parties, rather than impose them. Severely injured claimants are therefore dependent upon their own solicitor’s knowledge, experience and expertise to advise them about the possibility, availability and advisability of a periodical payments order.
At Boyes Turner we work closely with the families of brain-injured children to obtain the highest and most appropriate form of settlement. Our unique, multi-discipline team works with our experts to assess the individual needs of each client and then where compensation is received, we work to help ensure those needs are properly met.
Once liability is admitted, we secure substantial interim payments to provide early rehabilitation, respite and care and to meet essential capital costs such as adapted accommodation. We negotiate with the defendants’ representatives to achieve individualised settlements, combining lump sum and periodical payment orders as required, to provide our clients with flexible, workable and substantial compensation and financial security for the future.
If you are caring for a disabled child with cerebral palsy and would like to speak to one of our lawyers on 0800 307 7620 or email firstname.lastname@example.org.
On 30th March 2017, just ten days after the long awaited reduction in the discount rate came into force, the Ministry of Justice has issued a consultation, The Personal Injury Discount Rate: How it should be set in future.
The consultation purports to promote “fairness for all” and repeatedly re-states the commitment to provide 100% compensation for victims of negligence. However, it is clearly an appeal for any evidence or means which might provide justification for changing the way that compensation for severe long-term injury is calculated, with a view to reducing the cost of claims.
In her statement of 27th February, explaining her reasons for adjusting the personal injury discount rate to minus 0.75, which dramatically increased the multipliers in compensation claims involving long term future loss, the Lord Chancellor said, “The law is absolutely clear – as Lord Chancellor, I must make sure the right rate is set to compensate claimants. I am clear that this is the only legally acceptable rate I can set.”
The ‘only acceptable rate’, however, appears to be far too expensive for a government intent on reducing the cost of claims. The consultation paper seeks ideas for new ways of addressing this problem, but the government’s dilemma is clear. When the only legally and morally justifiable way of ensuring that injured victims are compensated for their loss feels too expensive, how can a system which must be seen to support the principle of 100% compensation for victims of negligence, reinvent itself to ensure that it doesn’t?
The answer suggested by the consultation paper is to undermine the principle upon which the law and the practice of personal injury compensation is based. The discount rate which largely determines the multiplier by which the claimant’s annual losses (such as costs of care) are multiplied must be set in accordance with The Damages Act and the case law, principally the House of Lords’ decision in a case called Wells v Wells. The Law Lords overturned the Court of Appeal’s decision in that case, on the basis of a presumption that injured victims of negligence, who are dependent on their compensation and unlikely to have other fallback income to rely on, will probably be risk averse investors and cannot be assumed to reap the benefit of the higher interest that a more risky investor could achieve.
The dramatic drop in interest rates over recent years and the continued, (and largely correct) assumption that claimants derive only the lowest rates of interest on investment of their damages, has left the Lord Chancellor with no choice other than to reduce the discount rate to a negative figure. Now, having complied with the law and restated the compelling reasons for doing so, when faced with its inevitable expensive consequences, the Ministry of Justice invites us to revisit those assumptions, circumventing the House of Lords’ rationale in favour of the more palatable Court of Appeal approach which we must remember was subsequently overturned. The consultation says, “A different balance could be struck by altering the underlying assumption that claimants adopt a degree of investment risk.”
Of course it could, but would it be true?
The expert panel appointed by the former Lord Chancellor to advise on how the discount rate should be set, after the last attempt to review the system by consultation in 2012 gave inconclusive results, didn’t seem to think so. The current consultation refers to the panel’s decision; “They unanimously agreed that it would be appropriate to set the discount rate by reference to ‘risk free’ returns, such as ILGS, without regard to the actual investments made.” In considering other investment approaches, “They concluded that not all of these were consistent with the legal principles presently governing the Lord Chancellor’s choice.”
In addition, the consultation reminds us that defendants have the right to challenge the assumption that any individual claimant will be a low risk investor on a case by case basis – an entitlement which has rarely been taken up. Presumably, high-risk-investor claimants are very hard to find.
At Boyes Turner we see first-hand the physical, mental, emotional and financial impact that negligently caused serious injury has on our clients. We are committed to helping them by achieving the highest levels of compensation, applied to achieve the maximum restitution of mobility, independence and rehabilitation. Our aim is to help provide our clients with the care, accommodation and other facilities that they need to bring them, in so far as it is possible to do so with money, back to the position that they would have been in but for the negligence which injured them.
We work with our clients’ families, experts, counsel and those representing the defendants to secure compensation in the way that will be of greatest help to the claimant, via early interim payments, lump sums and life-long periodical payment awards.
Through our multi-disciplinary approach, and working closely with the Court of Protection, we assist our clients in the investment and wise expenditure of their money.
If you are caring for someone who has been disabled by negligence call us on 0800 307 7620 or email email@example.com.