What Costs Apply to Clinical Negligence claims post 1 October?
Posted on 2nd October 2023 at 13:09
By Sean Linley, Senior Costs Draftsman
So October 1st, 2023 came and went and with it saw the implementation of fixed recoverable costs from most civil litigation claims with a value of up to £100,000.00.
The application of the reforms applies to Clinical Negligence claims with a value of up to £100,000.00 where "both breach of duty and causation have been admitted".
We know that fixed recoverable costs in Clinical Negligence claims will apply (under the October reforms) where such a case is allocated to the Intermediate Track.
CPR 26.9(10) is very important for Clinical Negligence practitioners. It provides that:
"A claim MUST be allocated to the multi-track where that claim is […] one which includes a claim for clinical negligence, unless both breach of duty and causation have been admitted."
This means that a Clinical Negligence claim, where the cause of action accrues on or after 1 October cannot be allocated to the Fast or Intermediate Tracks where breach of duty and causation have not been admitted. Practitioners at any allocation hearing need to be making this clear. Multi-Track allocation means time basis costs.
Of course there remain issues:
1. What do the rules mean by admissions of breach of duty and causation? There is a lively debate as to whether this is intended to be partial or full admissions. Sir Jackson's view in his original report was that it should apply only to claims where quantum is in dispute, however, the rules do not specify this. It's an area likely to be challenged.
2. What about a perspective Fast Track Clinical Negligence case where there are admissions of Breach of Duty & Causation? It appears that the intention will be for such claims to come under the ambit of the Intermediate Track though in principle there is nothing in the rules preventing a possible Fast Track allocation.
3. Timings of Admissions likely to be relevant (in future). The government consultation which closed in September proposes to tighten up the rules so any admissions have to be made by the Letter of Response and where admissions are after this time a claim ought not to be fixed. The government's response to the consultation is awaited and any changes will not be made until April 2024 at the earliest but this may alter the extent of which claims fall under fixed costs on the Intermediate Track.
4. What about the sub £25k Clinical Negligence scheme? There are no rules published and this remains subject to a live consultation, due to close on 27 October 2023. Until the rules are published we do not how this will apply, save that fixed costs are intended to only apply pre-issue and will apply based upon settlement value rather than allocation. Whilst this article acknowledges these changes, it is concerned with the application of the October reforms. The sub £25k Clinical Negligence scheme proposed implementation date is 6 April 2024.
The Government's July 2023 consultation paper states that "under the new rules from October, the only clinical negligence claims that can be subject to FRC are intermediate track claims 'where both breach of duty and causation have been admitted'.".
This, however, does not state that a Clinical Negligence claim is incapable of Fast Track allocation where there are breach of duty & causation admissions but it does seem to make clear fixed costs wouldn't apply, in principle, to Fast Track claims.
Prime facie, this seems simple, Fast Track claims are not subject to fixed costs until the Department of Health's (DOH) scheme is in situ. However, the rules tell a different story. CPR 45.1(3) provides that "the court may only award costs in amount that is neither more nor less than the fixed costs allowed by the applicable section." Section VI governs Fast Track claims. So we have a clear tension between the rules and what the government are saying.
One pragmatic solution the judiciary may take is to simply allocate any applicable Fast Track cases on the Intermediate Track up and until the separate DOH scheme is implemented. This means Fast Track cases would be subjected to fixed recoverable costs.
If an applicable claim were to be allocated to the Fast Track then giving the conflicting information between the government's stated intention and the rules it's impossible to know what costs would be allowed and whether these would be fixed or not.
The rules on the DOH scheme are awaited but one can envisage more uncertainty ahead given that the stated intention of those rules is to apply pre-issue only with the costs rules for the applicable tracks applying post-issue. Will this see applicable Clinical Negligence claims fall back under the ambit of Fast Track fixed costs? You need a crystal ball.
The image below sets out the various positions and what would happen depending upon allocation. Claims with a denial of breach of duty & causation cannot be allocated to the Fast or Intermediate Tracks and so cannot be subject to fixed recoverable costs.
So the key points:
1. Where breach of duty & causation is denied then the claim must be allocated to the Multi-Track. This means costs are not fixed.
2. Only claims where there are admissions of Breach of Duty & Causation can be allocated to the Fast or Intermediate Tracks. It's unclear what costs apply in Fast Track cases. Fixed costs will apply in the Intermediate Track.
3. We do not yet know whether admissions of Breach of Duty & Causation means either full or partial admissions. We have conflicting information between the government's own papers and the rules. This will likely be tested at court.
4. We await clarity on the timing of those admissions and whether this impacts the applicable costs regime. It's proposed admissions should be made by the Letter of Response.
5. There will be a separate fixed costs scheme for Clinical Negligence cases which settle for less than £25,000 though it is proposed such a scheme will only apply pre-issue. The rules are yet to be published but there remains uncertainty about costs post-issue for Fast-Track cases.
6. The issue with Fast Track claims will only apply to those which fall on to the October reforms but before the DOH reforms. This is those where the breach accrues on or after 1 October 2023 and does not fall on to the DOH scheme. The proposed transitional provision for the DOH scheme is that it will require a compliant Letter of Notification or Claim to be sent pre-implementation, currently set as 6 April 2024. If implementation is delayed then more claims could be subjected to uncertainty.
7. Even with the sub-£25k Clinical Negligence scheme uncertainty persists about post-issue costs for Fast Track claims. Will the rules, once published, address this with any clarity?
Lots for Clinical Negligence practitioners to be thinking about and to navigate. The lack of joined up approach between the Ministry of Justice and Department of Health is stark here. Just a little more clarity in the rules could have removed the uncertainty.
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