THE LEVEL of costs claimed by lawyers when their clients are awarded damages in medical negligence cases are unsustainable and bear no relation to the amount of work the lawyers actually do, the director of the State Claims Agency, Ciarán Breen, has said.
Mr Breen said it was the experience of the State Claims Agency’s Clinical Indemnity Scheme, which now handles all actions for damages taken against hospitals and healthcare workers, that costs appear to be determined by the quantum of damages awarded rather than on the basis of the legal work carried out.
In the average catastrophic injury case such as a cerebral palsy case, he said legal costs could add €1 million, or more, to the cost of resolving it.
An analysis of the Clinical Indemnity Scheme’s claims portfolio shows the average level of damages in cerebral cases has amounted to €3.7 million. The plaintiff’s solicitor in such cases usually seeks 10 per cent. Barristers and senior council costs would be extra.
“Why should a solicitor be paid a high professional fee just because a high level of damages is awarded?” Mr Breen asked.
He said the idea that we would be compensating lawyers to such an extent in the current economic climate when taxpayers were being asked to take some pain was “wrong”.
“I think it behoves me as director of the State Claims Agency, who is spending taxpayers’ money, to advocate that proper structural changes be brought about in relation to plaintiffs’ costs, particularly in medical malpractice actions. Plaintiffs’ solicitors and counsel are going to have to seriously look at what they are charging in relation to these cases,” he added.
While Mr Breen said the UK’s National Health Service Litigation Authority (NHSLA) was also concerned about the relatively high level of costs incurred in clinical negligence claims, the level of payouts to lawyers here in such cases were even higher than in the UK in percentage terms.
“For each euro of compensation paid to claimants, the Clinical Indemnity Scheme paid an additional 56 cent in legal costs. This contrasts with an equivalent figure for the NHSLA of 43 pence in legal costs for each £1 of compensation paid,” he said.
In smaller medical negligence cases here, legal costs very often exceeded the amount of damages, he confirmed.
The system of measuring costs needs “to be transformed so that costs are measured on the basis of work actually done rather than the current system of determining costs by reference to the quantum of damages”, he stressed.
He explained that when both sides could not agree on costs, the only option was to go to a taxing master and this also cost money. The State Claims Agency must pay 6 per cent stamp duty on the taxed bill of costs in these situations and therefore it must be sure it will get at least a 6 per cent reduction in the costs before it will be worthwhile for it to contest them.
“The taxation of costs system as it is currently constituted does not seem to me to yield the right kind of equity between the parties in terms of costs,” he said.
In terms of how the overall system of determining costs might be transformed, he said the Haran legal costs working group, which reported in 2006, had put forward proposals he agreed with but they were never implemented. One of its key recommendations was the setting up of a new legal costs regulatory body, which would formulate guidelines for pricing legal services. Higher amounts would have to be justified to a legal costs assessment office.
The State Claims Agency will also be coming forward with other suggestions on how costs might be curtailed by late June.