Closed consultation

Fixed recoverable costs in lower damages clinical negligence claims – a supplementary consultation on disbursements

Updated 10 November 2023

Applies to England and Wales

This consultation originally ran from 15 September to 27 October 2023.

It has been re-opened as one question was missing from the online survey. This was not an issue with responses submitted by email, and all the questions were included in this document.

The question asked if respondents had any alternative proposal to the proposals on disbursements outlined in this document.

If you want to respond to this question or to the full survey, see the ‘How to respond’ section below.

If you indicate in the online survey that you’re completing the survey for the second time, you’ll be prompted to answer the missing question only.

Introduction

This consultation supplements, and should be read in conjunction with the document Fixed recoverable costs in lower damages clinical negligence claims: government response.

It covers:

• the background to this supplementary consultation and why it has been published
• government proposals on disbursements within the Lower Damages Clinical Negligence Claim Fixed Recoverable Costs (LDFRC) scheme
• a summary of changes to proposals for bolt-on costs for cases involving protected parties within the LDFRC scheme
• consultation questions on the disbursement proposals
• next steps

‘Lower damages claims’ in the LDFRC scheme refers to clinical negligence claims with a value at settlement or judgment from £1,501 to £25,000 inclusive. The lower limit of the LDFRC scheme is equivalent to the maximum value of any claim for damages for personal injuries for non-road traffic accident personal injury claims in the small claims track (as set out in CPR Rule 26.9(1)(a)(ii)(cc). This maximum value was increased from £1,000 to £1,500 in April 2022.

Further copies of this publication and associated documents can be obtained by contacting:

Clinical negligence FRC consultation
NHS Policy and Performance
Department of Health and Social Care
39 Victoria Street
London SW1H 0EU

Or by emailing frcconsultation@dhsc.gov.uk.

Alternative format versions of this publication can be requested from the above address.

An updated impact assessment and equality duty analysis were published alongside the government response to the 2022 consultation and can be found on the consultation page. That impact assessment includes at page 30 sensitivity analysis on disbursement arrangements, including the impact of making different packages of disbursements separately recoverable or not separately recoverable. The equality duty analysis includes discussion of bolt-on costs and potential impacts on protected party claimants in further detail on page 9.

Complaints or comments about the consultation process

If you have any complaints or comments about the consultation process you should contact the Department of Health and Social Care (DHSC) at the above address.

Background

In 2022 DHSC published a consultation on its proposed policy on fixed recoverable costs (FRC) for claimant legal costs in lower damages clinical negligence claims (claims valued between £1,501 and £25,000). The consultation ran from 31 January to 22 April 2022. The department’s response was published on 15 September 2023.

Several consultation responses said that the government should describe in more detail proposed arrangements for disbursements generally under the FRC scheme, or arrangements for each disbursement type. We acknowledge that the position on disbursements was not sufficiently clear in those proposals.

This short consultation is intended to address this and considers the recoverability of disbursements within the LDFRC scheme. It seeks views on whether the cost of disbursements should be included within the specified recoverable costs in the LDFRC scheme or should be additionally and separately recoverable, and which disbursements should be included. The position on claims made on behalf of protected parties (people without mental capacity) and children is set out in the consultation response document and discussed further in this consultation document as part of the overall package for these claims.

For the purposes of this consultation, the disbursements we are referring to are the sums that would be recoverable in a clinical negligence claim in addition to profit costs in accordance with the relevant cost rules.

The outcomes of this consultation will inform the policy position on disbursements within the LDFRC scheme. This consultation will not delay the implementation of the wider FRC scheme for lower damages clinical negligence claims. We are currently working with the Civil Procedure Rule Committee to consider and implement the proposals set out in the response to the 2022 consultation. We will work with the committee to incorporate a position on disbursements following the conclusion of this supplementary short consultation.

Position on disbursements in the wider consultation

The 2022 consultation did not cover the recoverability of disbursements in detail, stating only that the proposed fixed costs set out were ‘exclusive of VAT and legal disbursements’.

The consultation also proposed and sought views on an additional bolt-on amount of £650 for cases involving protected parties and children to reflect the additional work involved in preparing these cases.

Responses to the 2022 consultation on this issue

A quarter of respondents raised issue with the proposals for funding disbursements. Respondents sought clarity on the scope of the recoverability of disbursements, including for court fees, counsel fees, expert reports and ‘after the event’ (ATE) insurance premiums covering expert report costs.

A number of claimant respondents felt that funding disbursements from the costs set out in the grid in the consultation would place an extra costs pressure on claimants.

Separately, respondents raised concerns about the bolt-on amount for claims made by protected parties and children, stating that the proposed bolt-on amount would not be sufficient to cover disbursements (counsel fees and court fees) in these claims, especially given the extra solicitor time needed to manage these claims and to prepare for Part 8 approval hearings.

The way forward

We welcome the responses to the consultation on the issue of disbursements and have taken these views into account in reaching the proposals set out below. We have also considered further the arguments put forth on disbursements in the 2019 Civil Justice Council (CJC) working group report on FRC for lower value clinical negligence claims,^{[footnote 1]} which focused on the use of counsel in the pre-issue process. We have also reviewed historical data on disbursement use in clinical negligence claims in the LDFRC value band.

Expert report fees and ATE insurance premiums covering the cost of expert reports

Evidence from medical experts is integral to the process of resolving clinical negligence claims, including the claims to be included in the LDFRC scheme. Insurance premiums relating to the cost of expert reports are also currently a key mechanism to manage the cost risks of medical expert evidence. We consider it imperative that these elements of cost are separately recoverable across all claims in the LDFRC scheme.

Counsel advice

The CJC report set out arguments from claimant group representatives in the CJC working group that in some claims, obtaining early counsel advice may be helpful in identifying and narrowing issues early on and facilitate quicker progress. Claimant legal representatives therefore felt that counsel fees should be separately recoverable. Against this, defendant legal representatives in the CJC working group felt that counsel advice was rarely needed in lower damages clinical negligence claims and there was a risk that counsel advice may be sought inappropriately. Defendant legal representatives therefore considered the costs of obtaining this advice should not be separately recoverable.

Our view, having taken these views into account, is that counsel’s advice is rarely needed and would seldom be appropriate in the pre-issue phase in lower damages clinical negligence claims that do not involve children or protected parties. In addition, we have not seen evidence on the relationship between the speed of resolution and obtaining early (pre-issue) advice from counsel in these claims that would support the views of the CJC claimant group. We are also concerned that allowing separate recoverability could encourage unnecessary or inappropriate use of counsel in claims in this value band, which would increase the overall costs of conducting claims and undermine the principle of FRC.

Court fees

For lower damages claims that do not involve children or protected parties, court fees should only be required, pre-issue, in the specific circumstance where proceedings are started as a result of a limitation period that is about to expire. This circumstance is provided for in the proposals set out in the response to the 2022 consultation.

Summary

We are therefore proposing that expert report fees and ATE insurance premiums in respect of expert report fees will be separately recoverable for all claims as there is a requirement for both parties to exchange expert evidence. Counsel advice fees would not be separately recoverable for claims that do not involve protected parties or children. Similarly, court fees would not be separately recoverable for non-protected party or child claims (except in the specific circumstance where proceedings are started as a result of a limitation period that is about to expire).

We acknowledge that in conducting a claim, claimants may on occasion incur disbursement costs in addition to expert fee disbursements (or related ATE insurance premium disbursements). However, we are of the view that the grid costs proposed in the full consultation response are sufficient to cover such costs.

Claims involving protected parties or children

Part 8 approval hearings

We recognise that claims involving protected parties or children have known costs relating to Part 8 approval hearings, required to approve pre-issue settlements where a claimant is a child or a protected party. This includes the need for counsel advice and the court fees relating to issuing Part 8 approval proceedings. We recognise that the scheme needs provision for these costs to ensure FRC does not become a barrier to access to justice.

We therefore propose that, for protected party and child claims, counsel and court fees should be separately recoverable where they are required in respect of Part 8 approval hearings. As with all other claims in the scheme, disbursements in respect of expert reports and ATE insurance premiums would be separately recoverable.

Increased bolt-on amount

In the January 2022 consultation, ‘Fixed recoverable costs in lower value clinical negligence claims’, we proposed a bolt-on amount of £650 for claims involving protected parties and children in recognition of the costs of known extra items of work in those claims. Some claimant respondents argued that the amount proposed was too low and that because of the level of work involved, it would be uneconomical for claimant firms to take on these claims, raising an access to justice risk. As set out in our response to that consultation, in recognition of these concerns and known costs, we intend to increase the bolt-on amount for these claims substantially to £1,800.

It is our view that this increased bolt-on amount, in conjunction with the proposed approach to disbursements in cases involving protected parties and children set out above, should adequately protect those claims from unacceptable access to justice risks.

Summary of proposals

We propose the following approach to disbursements.

All LDFRC scheme claims

For all LDFRC scheme claims we propose that expert report fees and ATE premiums covering the cost of expert reports will be separately recoverable.

LDFRC scheme claims involving protected parties or children

For LDFRC scheme claims involving protected parties or children we propose that:

• counsel fees in relation to Part 8 approval hearings will be separately recoverable
• court fees in relation to Part 8 approval hearings will be separately recoverable

LDFRC scheme claims that do not involve protected parties or children

For LDFRC scheme claims that do not involve protected parties or children we propose that:

• counsel fees will not be separately recoverable
• court fees will not be separately recoverable (except in the specific circumstance relating to the fee for issuing proceedings, where proceedings are started as a result of a limitation period that is about to expire)

Consultation questions

We would welcome your views on the following questions.

Question

Do you agree or disagree with the proposals on disbursements within the FRC scheme for lower damages clinical negligence claims?

• agree
• disagree
• not sure

Please explain your answer. (maximum 1,000 words)

Question

Do you have an alternative proposal? (maximum 1,000 words)

Question

Do you have any data on the prevalence of disbursements for claims in this value band that could be relevant to the proposed way forward?

This refers to claims with a value at settlement, or following judgment, of between £1,501 and £25,000.

How to respond

Comments on these proposals can be submitted:

• via the online survey

• by post to:

Clinical negligence FRC consultation: disbursements
NHS Policy and Performance
Department of Health and Social Care
39 Victoria Street
London SW1H 0EU

• by email to: frcconsultation@dhsc.gov.uk

The consultation will close at 11.59pm on 22 December 2023.

Next steps

We welcome views on the proposals set out above. We will review all responses to this supplemental consultation and use these to inform a final policy position on this issue. We will then publish a short response to this consultation setting out the government’s final policy position on disbursements. We will also work with the Civil Procedure Rule Committee (CPRC) to incorporate this policy position into the LDFRC scheme.

We propose to review the impact of any changes within 3 years of any legislation implementing these proposals coming into force.

Privacy notice

Summary of initiative or policy

The government is seeking views and evidence on the recoverability of disbursements within the Lower Damages Fixed Recoverable Costs (LDFRC) scheme. It seeks views on whether the cost of disbursements should be included within the specified recoverable costs in the LDFRC scheme or should be additionally and separately recoverable, and which disbursements should be included.

This notice sets out how data collected through this consultation will be used and your rights under the General Data Protection Regulation (GDPR).

Data controller

The Department for Health and Social Care (DHSC) is the data controller.

What personal data we collect

You can respond to this consultation online, by email and by post.

We collect and process the following personal data when volunteered by you:

• your name
• your contact information, such as your email address
• your employment status
• your geographical location
• any other personal data you volunteer by way of evidence or example in your response to the consultation

If you respond via the online survey, we will also collect your internet protocol (IP) address for security purposes (but this will not be attached to your survey response).

How we use your data (purposes)

Your data will be treated in the strictest of confidence.

We collect your personal data as part of the consultation process for the following purposes:

• so that we can contact you regarding your response and/or to work with DHSC to provide more details on the policy impact of reforms (where you have provided your express consent)
• for analytical purposes, for example, to understand the types of individuals and groups providing evidence

Legal basis for processing personal data

Under GDPR, the lawful basis we rely on for processing this information is for the performance of a task carried out in the public interest, or in the controller’s official authority - namely, consulting the public on reforms.

Data processors and other recipients of personal data

SocialOptic is a data processor commissioned by DHSC to run the online version of this consultation, using the survey platform SurveyOptic.

All responses will be seen and analysed by professional analysts, policy and litigation leads working on clinical negligence in DHSC. DHSC may also share your data with other organisations which have a direct interest in the reforms on which we are consulting, including Ministry of Justice, HMT, Cabinet Office, NHS Resolution, external researchers (academics and research organisations) and DHSC partner organisations.

For the purposes of any publication, responses will be aggregated and only reported for groups with 10 or more respondents. Any comments that are cited to highlight key themes in the data will be anonymised to safeguard against individuals being identified.

DHSC may disclose your data in response to a court order or other legal obligation where it would not breach your data protection rights to do so.

International data transfers and storage locations

We handle your personal data in accordance with appropriate procedures and technologies to maintain and protect its security, availability, confidentiality and integrity, and prevent its unlawful or unauthorised processing, accidental loss or damage, from its collection until its destruction.

Storage of data by DHSC is provided via secure computing infrastructure on servers located in the European Economic Area (EEA). Our platforms are subject to extensive security protections and encryption measures.

Storage of data by SocialOptic is provided via secure servers located in the United Kingdom (UK).

Retention and disposal policy

DHSC will only retain your personal data for as long as:

• it is needed for the purposes of the consultation
• the law requires us to

We will retain the data for as long as it is needed for the purposes of the consultation and the implementation of the LDFRC scheme, which we anticipate will be no longer than 5 years.

SocialOptic will securely erase your data 5 years after the consultation closes or when instructed to do so by DHSC if the data has served its intended purpose (whichever happens earlier).

How we keep your data secure

We use appropriate technical, organisational and administrative security measures to protect any information we hold in our records from loss, misuse, unauthorised access, disclosure, alteration and destruction. We have written procedures and policies which are regularly audited and reviewed at a senior level.

Your rights as a data subject

By law, data subjects have a number of rights and this processing does not take away or reduce these rights under the EU General Data Protection Regulation (2016/679) and the UK Data Protection Act 2018 applies.

These rights are:

1. The right to get copies of information – individuals have the right to ask for a copy of any information about them that is used.

2. The right to get information corrected – individuals have the right to ask for any information held about them that they think is inaccurate, to be corrected.

3. The right to limit how the information is used – individuals have the right to ask for any of the information held about them to be restricted, for example, if they think inaccurate information is being used.

4. The right to object to the information being used – individuals can ask for any information held about them to not be used. However, this is not an absolute right, and continued use of the information may be necessary, with individuals being advised if this is the case.

5. The right to get information deleted – this is not an absolute right, and continued use of the information may be necessary, with individuals being advised if this is the case.

Comments or complaints

Anyone unhappy or wishing to complain about how personal data is used as part of this programme should contact data_protection@dhsc.gov.uk in the first instance or write to:

Data Protection Officer
1st Floor North
39 Victoria Street
London
SW1H 0EU

Anyone who is still not satisfied can complain to the Information Commissioners Office. Their website address is www.ico.org.uk and their postal address is:

Information Commissioner's Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF

Automated decision-making or profiling

No decision will be made about individuals solely based on automated decision-making (where a decision is taken about them using an electronic system without human involvement) which has a significant impact on them.

Changes to this policy

This privacy notice is kept under regular review, and new versions will be available on our privacy notice page on our website. This privacy notice was last updated in September 2023.

1. Civil Justice Council (2019). Fixed Recoverable Costs in Lower Value Clinical Negligence Claims. Report of the Civil Justice Council Working Group. London, Courts and Tribunals Judiciary. ↩