Hard Times:Legal costs are under the microscope in the latest bid to reduce spending, writes EITHNE DONNELLAN, Health Correspondent
WITH MONEY for all services tighter now than in decades, individuals, businesses, the Government and its agencies are all trying to cut costs.
The latest target in the drive to curtail spending are lawyers, who the State Claims Agency says are charging fees for bringing medical negligence cases which are so high they are unsustainable.
Ciarán Breen, the director of the State Claims Agency, said last week the level of costs claimed by lawyers when their clients were awarded damages in medical negligence cases appeared to be determined by the quantum of damages awarded rather than on the basis of the legal work actually 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. The average level of damages in cerebral palsy cases is €3.7 million. He wants the system of determining costs reformed so that they become “proportionate”.
Not surprisingly solicitors, who he said were claiming about 10 per cent of the multimillion euro awards made in cerebral palsy cases as costs, are not too happy about what he had to say.
Michael Boylan of Augustus Cullen Law Solicitors, who has vast experience in pursuing medical negligence cases, said it was “a bit rich” for representatives of the State to be complaining about the legal costs of defending medical negligence cases against State hospitals when the State usually vigorously defended cases taken against it until they get to the door of the court, thus driving up costs.
“In my view the State could save very significant sums of legal costs if they owned up at an early stage, admitted responsibility and offered to pay compensation to injured patients with a meritorious claim,” he said.
“In my view if a patient is injured in a public hospital as a result of the fault . . . of the hospital/doctor, there should be a duty of candour and the State should inform the injured patient of what has occurred. Instead, there is a total lack of disclosure and all of the information in the possession of the HSE and the State Claims Agency is withheld from the patient and every attempt is made to avoid responsibility until the eve of trial when by that stage significant extra and unnecessary costs have been incurred,” he added.
Ernest Cantillon, a Cork-based solicitor who also deals with many medical negligence cases, said costs were significant because cases were settled so late in the day.
“It is my experience that cases, where there is clear-cut negligence, are not being identified early, or at all, by the State Claims Agency. Settlement offers come only on the day that a case is listed for hearing, some years after the ‘medical accident’, and after significant costs have been incurred.
“I have just finished a case where in fact there was no settlement offer until the third week of the hearing when an offer was made, which was accepted in the third week, which would have been accepted in the first week or indeed, three years earlier, if it had been made,” he said.
He added that while he had great respect for Mr Breen, he found his comments on how solicitors’ legal costs were calculated surprising if not disingenuous.
“Mr Breen paints the picture that solicitors are charging a percentage of the value of the case, and this is simply not so. The fees are calculated on the basis of the work done. He knows it. Undoubtedly, it is a feature that the value of the case has some relationship to the quantum of costs, because the responsibility is obviously greater in the bigger cases, but also there is a considerable amount of work to be done in large cases,” he said.
Furthermore, he said that when costs were not agreed in a case, cost accountants had to assess the amount of work done by solicitors and sometimes this was argued over many days before a taxing master and “the work that was done by the victim’s solicitor is gone through with a fine tooth comb”.
He suggested Mr Breen, in putting the spotlight on solicitors’ fees, was trying to deflect attention away from “other problems” he and the HSE faced, like the fact that a significant number of claims were being brought against hospitals.
Mr Breen denied claims were dragged out by his agency. He said the State Claims Agency, once it established, on the basis of the expert evidence available to it, that a hospital or healthcare worker was negligent, would admit liability at the earliest opportunity.
“This is not a rare event. There have been many cases where we have admitted liability and where we have entered into immediate settlement talks in advance of any court hearing with the plaintiff’s legal team,” he said.
“Our mandate is to settle cases at the lowest achievable cost and we always attempt to do that,” he said. “But it isn’t the case that all of our cases are settled on the steps of the court.”
He said that up to July 2002, when the State Claims Agency’s Clinical Indemnity Scheme took over the handling of claims for compensation against healthcare workers and since February 2004 when it took over the handling of such claims against hospital consultants, claims for damages were handled by different insurers and cases took longer to conclude.
“We have narrowed the lifetime of a medical negligence case . . . from anything from five to six years to three years from the date of incident,” he said.
However, he said, this had unfortunately not brought down the legal costs associated with these cases. “You would image that it should but it hasn’t – because of the very point I made which is that costs are related to quantum rather than time worked.” Furthermore, he said, now that all the information in relation to claims for damages and the costs associated with them were handled by one agency, it was easy to see certain trends emerging.
He said he had statistical data to underpin his contention that lawyers’ fees were determined by the quantum of damages awarded rather than on the basis of legal work done.
In terms of how the overall system of costs might be transformed, he said the Haran legal costs working group which reported to the Department of Justice 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 Haran report was at the time broadly welcomed by the Law Society.
So what became of it? A Department of Justice spokeswoman said legislation was now being prepared on foot of it to bring “greater transparency to the calculation of legal costs”.
When the legislation will be published though is not clear.
Meanwhile, Mr Boylan pointed out that an expert group set up by the Department of Health in 2000 to look at establishing a no-fault compensation scheme in birth injury/cerebral palsy cases and ways of saving on the legal costs of processing such cases in the courts had still not concluded its work. Mr Boylan, a member of the group, said it did good work for a number of years “before being put into limbo as a result of a decision by Minister Mary Harney”.
However, the group was reactivated in 2007 and met every month until last summer.
The suspicion is the group’s recommendations, if finalised and published, would have proved too costly to implement.
Sheila O’Connor of Patient Focus, a group which has supported several women in pursuing cases against the former Drogheda obstetrician Michael Neary, said she didn’t know for sure how solicitors and barristers worked out their fees but her group had worked with a small number of lawyers who had been very helpful over the past 10 years and had waited a long time to be paid fees for doing a good job, despite institutions putting obstructs in their path.She said now, however, given the economic downturn, solicitors were asking patients for fees upfront to take cases. “That could mean that a lot of very serious cases may not ever see the light of day,” she said.