Archives for January, 2013
A TALE OF DISHONESTY OR AUSTERITY MEASURES BY STEALTH?
I’m sure I can’t be alone in noticing the obvious panic in Government circles in relation to the whole sorry saga of referral fees, recoverability, fixed portal costs and now the proposed raising of the small claims limit for personal injury to £5,000.00. In my article “RTA Portal Costs: a tale of dishonesty”published in the Gazette on 7 December 2012, I referred to what appeared to be intellectual dishonesty on the part of the Government. That dishonesty may have been a cloak to hide the Governments real agenda, namely the protection of the public sector budgets particularly that of the NHS.
It will be recalled that the Young Report was rushed out at the end of 2010 to be followed by a truncated “consultation” period during which only the insurance industry was invited to attend 10 Downing Street which resulted in the Government saying in February 2011 that they wouldn’t extend the small claims limit for personal injury and making it clear that they would ban referral fees and recoverability of success fees and ATE premia. There was no mention of fixed fees for fast track trials.
It became clear following the announcement on the ban for referral fees that there were ways around the ban either through the ABS vehicle or through a service agreement arrangement with referrers.
The Governments response in June was to say that they were reconsidering increasing the small claims limit for personal injury. Then, towards the end of the year, the Government proposed unviable rates for the extended portal system to be extended vertically and horizontally to include employment and public liability claims involving unlimited medical reports, non expert reports and witness statements for the first time all for a fee which would not cover a firm’s overhead never mind make a profit. The purpose of that proposal no doubt was to make it economically impossible for firms to get around referral fees via the service agreement route.
In addition to the proposed portal reforms the Government then, for the first time, proposed fixed costs for fast track trials which represent a cut of something of the order of 60% to 70% of costs per case particularly those prepared for trial which again would result in firms being unable to cover their overhead, never mind make a profit. Despite all the press comment of Claimants solicitors racking up huge costs because they get 100% success fees, there is no personal injury firm in the land has a 60%/70% profit margin. Even Lord Jackson in his report at Chapter 2 paragraphs 3.1 and 3.3 made it clear that the data under review demonstrated that only 0.2% ie one fifth of 1% of cases attracted 100% success fee.
Firms understandably don’t want to let it be known whilst we are still in a period of consultation that these proposals if implemented would result in firms having to shut down making hundreds if not thousands of people redundant and risk the Banks pulling the plug. This simply appears to have persuaded the Government that they still haven’t gone far enough so they then announced in the middle of December that they were considering the nuclear option of increasing the small claims limit to £5,000.00, the effect of which would be to deny the thick end of 80% plus of personal injury victims access to legal advice.
Why is the Government so determined to kill off Personal Injury Litigators for the dubious assurance from the insurance industry that if they do, insurance premia will be reduced?
I believe the answer has got nothing to do with insurance premia. It’s all about austerity. The Government recognises that the NHS, Local Authority and Police budgets are hard pressed as it is and having to pay damages and legal costs to people who are the victims of those Government Departments negligence are a significant drain on those limited resources. If the Government can kill off Personal Injury Litigators then a significant percentage of those budgets is protected. It is, I’m afraid, as cynical as that.
The Independent newspaper on 30 October 2012 revealed that one NHS Trust in five is in bad financial trouble and that the Department of Health is failing to plan for bankruptcies.
The NHS is facing a tsunami of claims. Every day you open a newspaper or turn on the radio to hear of the latest NHS scandal in terms of treatment of patients. Only last week the Worcester NHS had to pay out just short of half a million pounds to 38 families of patients who had died from starvation and thirst and for general neglect. The Health Secretary Jeremy Hunt was apparently appalled and disgusted at the revelation of years of grave malpractice.
The sum of half a million pounds may not be a huge amount of money but what that case shows is the general malaise of the NHS and its staff. It demonstrates the poor supervision and the sort of laissez-faire attitude that results from holding nobody to account for their wrongdoing.
Earlier this year the NHS settled 60 birth injury cases in the sum of £240 million. That’s an average of £4 million per case. I have tried but have been unable to identify anyone who has been disciplined let alone dismissed for those acts of negligence. Anyone in the private sector responsible for losing their employer £4 million would have received their P45 in very short order.
Earlier this year on the Today programme a Professor of Hospital Management was interviewed I think by John Humphries. What he had to say revealed a shocking failure on the part of NHS Managers to do even very basic risk assessment.
Huge numbers of people are given the wrong medication and wrong blood in the NHS. The figures have increased by more than 30% since 2002. The Professor of Hospital Management thought it might be a good idea if the NHS had one form throughout the entire organisation which would record the patient’s blood type and the medication they were on. We are talking about the sort of form you have at the foot or the head of your bed in a hospital ward. It may surprise some people that this isn’t already in place given the increasing numbers of people who are given the wrong medication and blood. The Professor then revealed that the same form isn’t even used throughout any given NHS Trust and John Humphries, for I think it was he, nearly choked on his cornflakes when he heard the Professor say that the same form isn’t even used throughout the same hospital in many cases.
This failure to recognise this obvious risk when we employ a significant number of Doctors and nurses for whom English is not the first language is an astonishing failure to address even simple risk management. If the NHS Managers can’t get that simple risk properly managed, is it any surprise that they are failing elsewhere.
The NHS is about to be overwhelmed with claims for damages and costs for a whole range of failures too numerous to list here unless the Government can kill off the Personal Injury Sector. There are very few firms, I struggle to name any, which practice exclusively in the area of clinical negligence. These firms rely on the cash flow generated by road traffic accident, public liability and employment cases which in the main although not always are concluded very much more quickly than clinical negligence claims. Clinical negligence departments are severely threatened by the Governments proposals and that is exactly what the Government wants to achieve.
The Government dare not address the problems of the NHS in this regard directly because they’d have to make admissions of rank failure and would incur the wrath of the Unions if there was any suggestion that NHS staff were being in any way criticised, particularly bearing in mind that it would present them with a golden opportunity to blame cuts in the NHS for the rising number of claims and point to the understaffing by qualified personnel, poor supervision and management throughout the NHS.
The Governments preferred ‘spin’ is to blame the victim for jumping on a compensation bandwagon driven by greedy ‘no win no fee’ solicitors whose tactics have encouraged fraud (7% according to the ABI – more like 2% of proven fraud which compares rather favourably with the 52% of MPs ordered to repay expenses by Sir Thomas Legg) and driven up insurance premia making everyone’s life an expensive misery.
It is often said that fighting this recession, the worst in living memory, is like fighting a war. I am reminded of that appalling condition invented by military doctors during the First and reappearing in the Second World War which was wholly unjust, cruel and a huge personal tragedy for the poor sods to whom it was ascribed, but is in fact a just, apposite and richly deserved diagnosis so far as this Government is concerned. The name of the condition? LMF – Lacking Moral Fibre.