Consultation outcome

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

Updated 8 May 2024

This document:

• summarises the views provided in response to the supplementary consultation on disbursements of fixed recoverable costs in lower damages clinical negligence claims
• sets out the government proposed way forward for disbursements, based on this consultation’s findings

It followed a wider consultation on fixed recoverable costs in lower value clinical negligence claims which ran from January to April 2022 and which the government responded to on 15 September 2023.

This supplementary consultation originally ran from 15 September 2023 to 27 October 2023. It was then re-opened and extended on 10 November 2023. This is because, although all questions were present in the consultation document itself, one question was missing from the live online survey, due to a digital error.

The missing question asked if respondents had any alternative proposal to the proposals on disbursements outlined in the consultation document. The re-opened consultation allowed respondents to provide further detail to this question.   

The extended consultation period ended on 22 December 2023.

A total of 91 responses were received for this consultation using either the online response tool or by email.

For alternative format versions of this publication contact:

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

Email frcconsultation@dhsc.gov.uk

You can also request more copies of this report and the consultation paper from the above addresses.

Complaints or comments

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.

Executive summary

Having considered the responses from this consultation, the government is going ahead with with proposals for disbursements in a claim for costs, within the Lower Damages Clinical Negligence Fixed Recoverable Cost (LDFRC) Scheme, with certain modifications.

Proposals consulted on

The consultation proposed the following approach to disbursements in the LDFRC scheme:

a. for all LDFRC scheme claims:

• expert report fees and ATE premiums covering the cost of expert reports will be separately recoverable

b. for LDFRC scheme claims involving protected parties or children:

• 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

c. for LDFRC scheme claims that do not involve protected parties or children:

• 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)

Changes to the proposals

In response to feedback received from respondents to this consultation, we would specify the below additional recoverable disbursements for all claims (modifying b and c above):

• allow recovery of court fees for a Part 8 application for pre-action disclosure, to ensure that parties are able fairly to obtain evidence such as medical records needed to pursue their claim in a timely manner
• allow recovery of disbursements in relation to  applications for a stay in proceedings in addition to disbursements relating to court fees to issue proceedings, where there are risks associated with limitation. Applying for a stay is a necessary part of the process to be followed where a claim has been issued due to limitation risks and we would clarify that it should therefore be recoverable as a disbursement

Additionally, we would clarify the following discrete issues:

Expert fees

Wording around disbursements for expert fees will make clear that associated costs of engaging with the claimant and their legal representatives in the production of the expert report are included alongside the cost of the report itself in the recoverable disbursement.

Inquest costs and disbursements

In keeping with recent changes to the Civil Procedure Rules relating to FRC arrangements for other claim cohorts, we will clarify that rules relating to costs and disbursements in the LDFRC scheme will not extend to inquest costs and disbursements which have been incurred in claims which are subject to LDFRC scheme costs. Inquest costs and disbursements will be recoverable to the extent that they would be in clinical negligence claims not subject to this FRC scheme.

The way forward

The government position on disbursements, in a claim for costs, in the LDFRC scheme, will now therefore be:

• for all LDFRC scheme claims:

  • expert report fees (including expert costs associated with the report) and ‘after the event’ (ATE) insurance premiums covering the cost of expert reports will be separately recoverable
  • court fees relating to an application for pre-action disclosure will be separately recoverable
  • inquest costs and disbursements will be recoverable to the extent that they would be in clinical negligence claims not subject to this FRC scheme
  • in the limited circumstances where limitation is due to expire imminently, the court fee for issuing proceedings, and any court fees incurred applying for or extending a stay of proceedings, where proceedings are started as a result of a limitation period that is about to expire, will be separately recoverable

• for LDFRC scheme claims involving protected parties or children:

  • 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

• for LDFRC scheme claims that do not involve protected parties or children:

  • counsel fees incurred in the pre-action phase will not be separately recoverable
  • court fees will not be separately recoverable, except as set out above, which is both:
    • court fees relating to an application for pre-action disclosure
    • in the specific circumstance relating to the court fee for issuing proceedings, and any court fees incurred applying for, or extending, a stay of proceedings, where proceedings are started as a result of a limitation period that is about to expire

Background

In 2022, DHSC published a consultation on its policy proposals 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 acknowledged that the position on disbursements was not sufficiently clear in those proposals.

This short consultation aimed to address this by proposing a way forward for the recoverability of disbursements for all claims within the LDFRC scheme. It sought views on those proposals and the questions of whether the cost of various disbursement categories for different groups of claims should be either one of the following:

• included within the specified recoverable costs in the LDFRC scheme

• additionally and separately recoverable

The position on fixed costs in claims made on behalf of protected parties (people without mental capacity) and children, including the specified bolt-on amount for those claims within the fixed costs framework, was set out separately, in the response to the 2022 consultation. 

For the purposes of this consultation response, ‘disbursements’ are costs incurred in a clinical negligence claim that are not ‘profit costs’, in accordance with the relevant cost rules.

Summary of responses

Question

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

Expert report fees and ’after the event’ (ATE) insurance premiums covering the cost of expert reports

In the consultation, we stated that we considered evidence from medical experts to be integral to the process of resolving clinical negligence claims, including those to be included in the LDFRC scheme. We also stated that insurance premiums relating to the cost of expert reports were important to manage the cost risks of medical evidence. As such, we considered it crucial that these incurred costs are separately recoverable across all claims in the LDFRC scheme.

There was overall support in our proposals that medical expert fees should be separately recoverable for all LDFRC scheme claims. Respondents emphasised the importance of obtaining expert evidence from medical experts to resolve LDFRC claims and providing for access to justice for parties. Respondents had concerns that if experts’ costs were limited, or not recoverable as disbursements, this could restrict the availability of experts, especially in certain specialities. However, some respondents suggested that while expert fees should be a separately recoverable disbursement, the government should explore the viability of a cap on expert fees, to ensure costs claimed for this work are reasonable and sustainable over the long term.

There was overall agreement on the importance of ATE insurance in the current system and that ATE premiums covering the costs of experts should be separately recoverable. Respondents stressed how important ATE insurance is to the LDFRC process and how it allows individuals to pursue a valid claim ensuring access to justice. However, some respondents highlighted the need to ensure that ATE coverage related only to the cost of expert reports and that government should explore approaches to ensuring that the cost of premiums was reasonable and sustainable.

Some respondents were concerned that the description of medical expert fee disbursements in the consultation proposals implied that only the fee for the expert report itself would be recoverable and that other associated costs in producing the report, such as costs incurred by the expert in engaging with legal representatives, should also be included in the recoverable disbursement.

The way forward

After considering the responses, our proposed way forward is that recoverability of disbursements for expert reports and ATE premiums should be permitted for all claims under the LDFRC scheme, as proposed.

Although we do not agree that expert fees, ATE premiums, or the recoverable amounts for these should be capped at this time, given uncertainty around the impact this could have on the provision of necessary medical expert evidence for these claims, we will monitor the costs of these items as part of the post-implementation review of this FRC scheme.

We agree, and will ensure that wording reflects, that recoverable disbursements for medical expert advice should cover the report itself and costs associated with the production of that report.

LDFRC scheme claims involving protected parties or children

Part 8 approval hearings - counsel advice and court fees

Claims involving a protected party or children necessarily incur costs in the form of disbursements relating to Part 8 approval hearings which are required to approve pre-issue settlements where a claimant is a child or protected party. These costs include the need for counsel advice and the court fees relating to issuing Part 8 approval proceedings.

Consultation respondents agreed with our proposal that disbursements in respect of counsel and court fees relating to Part 8 approval hearings should be separately recoverable for these 2 claim groups. A small number of respondents suggested that these fees should be paid out of the £1,800 bolt-on amount for these claims rather than as separately recoverable disbursements.

The way forward

The provision for claims involving protected parties or children is an important part of our approach to safeguarding access to justice. Our position remains, as proposed, that disbursements in respect of counsel and court fees relating to Part 8 approval hearings should be separately recoverable for these 2 claim groups.

We will monitor the arrangements proposed to safeguard access to justice in claims involving children and protected parties, and more widely across scheme claims, as part of our post-implementation review.

LDFRC scheme claims that do not involve protected parties or children

Counsel advice

The Civil Justice Council (CJC) working group report on FRC for lower value clinical negligence claims set out arguments from claimant and defendant group representatives on whether counsel advice was needed in LDFRC cases. Claimant group representatives advised that obtaining early counsel advice may be helpful in identifying and narrowing issues, whereas defendant representatives felt that counsel advice was rarely needed in LDFRC cases.

In this consultation we set out that our view, having taken these views into account, is that counsel’s advice is rarely needed and would not be appropriate in the pre-issue phase in lower damages clinical negligence claims that do not involve children or protected parties.

Some respondents disagreed with our proposals not to allow recoverable disbursements for counsel in LDFRC claims which do not include children or protected parties, asserting that lower damages clinical negligence cases can involve complex issues where counsel’s input would be justified. They argued that counsel’s early input can bring focus onto the issues and may help filter out unmeritorious claims. We also saw a limited set of evidence on the current usage and cost of counsel advice in lower value claims, though this related to the entire claim pathway and was not limited to the pre-issue phase.

Other respondents however asserted that in this type of case, especially in this lower value band, counsel’s advice, pre-issue, is very rarely needed.

Court fees

For LDFRC cases which do not involve protected parties or children, we proposed that court fees will not be separately recoverable except in specific circumstances relating to the fee for issuing proceedings, where proceedings are started as a result of a limitation period which is about to expire.

A small number of respondents disagreed with our proposal on the recoverability of court fees for these claims and stated that all court fees should be separately recoverable in all claims. It was also mentioned that court fees are substantial and the fees proposed in the LDFRC scheme would not properly cover this expense.

Respondents mentioned that it was not uncommon in the pre-action stage to make applications for pre-action disclosure due to the failure of a party to provide key information to allow an investigation to take place. It was suggested that court fee disbursements relating to a Part 8 application for pre-action disclosure should be recoverable.

It was highlighted that parties should be able to recover these costs in a timely manner, and not to provide for recoverability would put them at an unfair disadvantage.

Separately there was a call for clarity around the recoverability of disbursements for court fees in applying for a stay in proceedings, as well as for issuing proceedings (where limitation was an issue).

Additional disbursements

Certain respondents proposed separate recoverable disbursements for pagination fees. Respondents provided some data on pagination and asserted that these activities aided in the presentation and management of claims.

A small number of respondents said that translator fees for claimants with English as a second language, and tracing fees to locate defendants (such as for privately owned clinics and/or private surgeons), are necessary recoverable disbursements across all claims in the scheme.

The way forward

Taking into account the range of views expressed by respondents and a limited set of data presented on this issue, we remain unconvinced of the case that the need for counsel advice in the lower damages value bracket is sufficiently strong to provide for its recoverability as a disbursement across all claims in this FRC scheme, which relates only to the pre-issue phase.

We have proposed that court fees should be recoverable in certain circumstances where limitation issues necessitate that the claim is issued. However, where proceedings are started as a result of a limitation period that is about to expire, we’ll ensure that the wording of rules clarifies that court fees are recoverable for both:

• issuing proceedings
• applying for a stay

In response to concerns raised, we will also ensure that disbursements for court fees relating to a Part 8 application for pre-action disclosure are also recoverable, to ensure that parties are able to pursue disclosure in a timely fashion through the courts, in circumstances where that is necessary.

We have not seen any other court fees in the pre-issue stage that represent a substantial cost requiring a recoverable disbursement provision.

Having considered respondents’ views and a limited set of data provided as part of this consultation, we remain unconvinced of the case for other types of disbursements to be recoverable across all claims in this lower damages FRC scheme, which concerns only the pre-issue phase. While we agree that claims involve, and should involve, the pagination of evidence bundles, we believe this can reasonably be achieved without classifying that activity as a disbursement, for these lower damages claims, or providing for recoverability.

We would not support the idea that translation or tracing services should be separately recoverable as disbursements, since they are not often integral to lower damages claims in the pre-issue stage and, on the occasions where they may be required, they can be provided for within the existing fixed costs envelope.

We will monitor the use of disbursements in relevant claims as part of the post-implementation review and consider, at review, whether the position on recoverability across all claims remains appropriate.

Question

Do you have an alternative proposal?

The majority of respondents provided a single response that covered both of the first 2 questions (above) and some of these points are addressed in the section relating to the first question (above). However, respondents raised a small number of additional comments separately to the second question, which are addressed below.

Although this consultation did not concern the increased amount of the bolt-on costs for children and protected parties, a small number of respondents stated that the amount for ‘bolt-on’ costs was set too high. Suggestions for a different amount ranged from £1,200 to £1,500, rather than the proposed £1,800. It was also suggested that counsel fees for Part 8 hearings for children and protected parties should be funded from the bolt-on amount, rather than being recoverable as separate disbursements. We will monitor the appropriateness of the bolt-on amount as part of the post implementation review phase.

Some respondents felt that counsel fees should be recoverable as a disbursement in all claims in the scheme (rather than just in claims involving children or protected parties). They suggested that these costs could be regulated by requiring the claimant’s legal representative to demonstrate that counsel advice in each case was reasonable and proportionate. We will bear this suggestion in mind as part of the post implementation review phase.

Respondents suggested that expert reports and ATE premiums should be subject to reasonable caps. We do not agree with capping these costs at this time because there is significant uncertainty around the impact this could have on the provision of necessary medical expert evidence for these claims and insufficient evidence to mitigate this risk, at present. However, we will monitor the costs of these items as part of the post-implementation review of this FRC scheme, so that we have the benefit of more evidence from claims under the new system to inform a discussion about the risks and benefits of capping.

A further suggestion was either to fix amounts which could be claimed for each disbursement, or introduce a sliding scale for disbursements, which would be adjusted to the complexity of the claim. These ideas may have merit, but we consider that they would introduce undue complexity into what will already be a novel system and so would not favour this approach at this time. However, these are all suggestions that the government will take into account at the post-implementation review.

A further suggestion was that disbursements relating to inquests should be recoverable and respondents requested more clarity on the status of costs relating to inquests more generally. Our response below seeks to provide that clarity with regard to inquests.

The way forward

We would like to thank respondents for sharing their responses to this question. We have taken these comments and suggestions into account and will continue to consider them when the LDFRC scheme is rolled out and reviewed.

Importantly, we would like to provide greater clarity about costs associated with inquests, where inquests relate to claims in this FRC scheme. In keeping with recent proposed changes to the Civil Procedure Rules relating to FRC arrangements for other claim cohorts, we will make clear that rules relating to costs and disbursements in the LDFRC scheme will not apply to inquest costs and disbursements. As such, inquest costs and disbursements will be recoverable to the extent that they would be in clinical negligence claims not subject to this FRC scheme.

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?

We received a number of submissions containing data relating to the proposals. Due to data protection considerations, we are unable to share the detailed figures provided by respondents here, but an overall summary of the information received is as follows:

• data showing a selection of claims with damages up to £25,000 where counsel was instructed and the average cost of counsel in these claims
• data showing the average costs of disbursements (excluding counsel fees and ATE premiums) across a selection of claims with damages up to £25,000
• data on number of claims settled across a selection of claims, how many of these claims needed expert advice, the total amount paid to experts for these claims and the average cost paid per claim
• data showing the average costs of experts covering separate specialities in a selection of claims
• data for a selection of claims on pagination of medical records for cases under £25,000

The way forward

We are grateful for the data and information provided by respondents to this question, which we have reviewed and taken into account in considering these proposals, including in particular, in our plans for post-implementation review, which we signalled in our government response to the main consultation on the FRC scheme.

Next steps

The outcomes of this consultation will inform the policy position on recoverability of disbursements within the LDFRC scheme. The department is currently working with the Civil Procedure Rule Committee (CPRC) to consider and implement the proposals set out in the response to the 2022 consultation and will work with the committee to incorporate a position on disbursements following the conclusion of this supplementary consultation.

The intention set out in our government response to the 2022 consultation was that the new LDFRC scheme would be implemented in April 2024. However, due to the complexity of the reforms, the time needed for the CPRC to fully scrutinise the proposals and to allow sufficient notice to be given to the sector to prepare for these changes, our intention now is that the changes will be implemented in October 2024.