Government figures on funding of clinical negligence cases suggest no win, no fee agreements can replace legal aid

The Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) 2012 has, quite rightly, been heavily criticised by lawyers, campaigners, and politicians worried about how the most vulnerable and deserving in society will be able to access justice without the financial means to do so.

LASPO effectively turned off the tap of public funding for civil claims. The coalition government’s reasoning to help the nation out of the black hole of ‘deficit’ by discouraging unnecessary litigation at public expense has left hundreds of thousands unable to seek legal redress without resorting to ‘DIY justice’.

Official figures released by the Ministry of Justice (MoJ) have made for shocking reading. In 2012/13 the number of legal aid matters started was 573,672, compared with 173,373 in 2013/14, the first full year post-LASPO. The figures for 2014/15 show only 170,617 cases initiated, meaning nearly 3,000 fewer people received much needed help.

When comparing January to March 2015 with the same quarter in previous years, the figures show that the number of started matters fell from 134,501 in 2012/13 to 46,044 in 2013/14, before falling yet again to 43,307 for 2014/15.

To compound matters further, the government’s safety net – the exceptional funding mechanism – does not work. Though designed to help between 5,000 and 7,000 people, it has been an abject failure from the start, with only 70 applications granted of 1,516 received in the first year. This year has seen even fewer applications made – only 1,172 – although the numbers granted has at least increased to a measly 214.

Even attempts to push litigants to alternative forms of dispute resolution have flopped with new MoJ figures showing fewer separating couples now attend family mediation than before the introduction of LASPO.

Yet, as lawyers cry ‘We told you so’ – and even despite the Justice Select Committee’s critical indictment of LASPO – the government has been slow to implement a review of policy. Perhaps the Lord Chancellor and his junior ministers are holding on to the hope that LASPO will ‘come good’ as it appears to have done in clinical negligence claims.

The number of such claims funded by legal aid brought against the NHS Litigation Authority (NHSLA) has fallen post-LASPO. In 2010/11, the NHSLA saw 1,379 legal aid claims. Compare this figure to the numbers as of 31 May 2015, the end of NHSLA notification year, and we see just 448 clinical negligence claims funded by legal aid.

In a response to government proposals for reform of legal aid in 2011, a sub-committee of the Judges’ Council declared: ‘In practice, the majority of clinical negligence cases are legally aided,’ and that ‘… it must be highly questionable whether there is any other “viable” alternative to legal aid.’

The judicial response continued: ‘Whilst there are no data for the breakdown of this figure between cases that were legally aided and those that were not, it is likely that a substantial proportion will have been recovered in cases funded by legal aid,’ and: ‘The absence of viable funding arrangements for clinical negligence claims might be mitigated were there any proposals for dealing with all such claims in other ways…’

NHSLA data from 2009/10 shows that 1,822 claims were legal aid funded, compared to 5,843 funded by way of a conditional fee agreement (CFA). The latest data shows that the number of CFA claims has risen to 7,647, down from a high of 8,743 claims in 2012/13.

In fact, when you add together claims funded by legal aid, CFAs or by other means, including before the event insurance (BEI) or self-funding, we see that the number of claims against the NHSLA has increased from 9,174 in 2009/10 to 11,059 in 2014/15.

Dr Anthony Barton, medical practitioner and solicitor at Medical Negligence Team, told SJ: ‘The latest government figures on funding of clinical negligence cases shows the success of no win, no fee replacing legal aid. Access to justice is available to anyone according to the prospects of the claim. Payment by result imposes commercial discipline.’

Of course, this market success comes at a price for the government. With the NHSLA dealing with more claims than ever, having set aside £26.1bn to cover outstanding liabilities, and paying out £259m in legal fees in 2013/14, it is unsurprising the Department of Health (DoH) wants to limit the costs for clinical negligence claims up to £100,000.

This blog post was first published in Solicitors Journal on 8 July 2015 and is reproduced with kind permission