THE NHS REDRESS ACT 2006

by Anthony Barton

Introduction

1. The NHS Redress Act 2006 (NHSRA 2006) is our only statute entirely concerned with clinical negligence. The statute represents an attempt to address the problems of clinical negligence litigation. According to the NHS Litigation Authority (NHSLA) in 2006, £560 million was paid out in connection with hospital based clinical negligence; the contingent liability estimate is £8.22 billion. These figures do not even include general practice.

Background

2. There has been widespread longstanding concern about clinical negligence litigation: delay; disproportionate cost; poor success rate; excessive legal fees; complexity; and limited access to justice. In May 2001 the National Audit Office published the report ‘Handling Clinical Negligence Claims in England’.1 The report acknowledged the ‘enormous human and financial costs of clinical negligence’; the report recognised that there were four key bodies involved: the Department of Health, the NHSLA, the Lord Chancellor’s Department (as it was then), and the Legal Services Commission. In particular, the report identified the problems concerned with the management of small and medium sized claims.

1. ‘Handling clinical negligence claims in England’ a report by the Comptroller and Auditor General, National Audit Office, May 2001.

3. In August 2001 the Department of Health published ‘Clinical negligence: what are the issues and options for reform?’1 It was a call for ideas. The Chief Medical Officer established an advisory committee representing broad interests. The paper was wide ranging and was concerned with such issues as: complaints and clinical negligence; the process and basis of compensation; the nature of any inquiry; responsiveness to patient concerns; the quality and cost of managing claims.

1. ‘Clinical negligence: what are the issues and options for reform?’ Department of Health, August 2001.

4. In May 2002 the House of Commons Committee of Public Accounts published its report ‘Handling Clinical Negligence Claims in England’.1 The report identified some specific issues:

(1) reducing the incidence of clinical negligence;

(2) addressing patient needs;

(3) speeding up the handling of claims;

(4) reducing the cost of dealing with claims.

The Committee heard oral evidence from witnesses who were senior officers of the Department of Health, the Legal Services Commission, the NHSLA, and the Lord Chancellor’s Department. A written memorandum was admitted that included the assertion: ‘The problems of clinical negligence litigation are inextricably linked to the flaws of the legal aid system.’2

1. ‘Handling clinical negligence claims in England’ House of Commons Committee of Public Accounts, Thirty-seventh Report of Session 2001–2002, HC 280    (May 2002).

2. ‘Handling clinical negligence claims in England’ House of Commons Committee of Public Accounts, Thirty-seventh Report of Session 2001–2002, HC 280 (May 2002), Memorandum submitted by Dr Anthony Barton.


5. In June 2003 the Department published the Chief Medical Officer’s report ‘Making Amends’. It was a consultation paper setting out proposals for reforming the approach to clinical negligence in the NHS. The report was generally critical of tort law and proposed to ‘move the role of tort from its current central position to the outer perimeter of the NHS’ (wherever that may be). The report appeared to confuse the procedural and substantive aspects of civil litigation. The report contained 19 recommendations. Recommendation one was as follows:

‘An NHS Redress Scheme should be introduced to provide investigations when things go wrong; remedial treatment, rehabilitation and care where needed; explanations and apologies; and financial compensation in certain circumstances.’

Eligibility criteria for compensation would be:

(1) serious shortcomings in the standard of care;

(2) harm that could have been avoided;

(3) the adverse outcome was not the result of natural progression of an illness.

With respect, these criteria appear strikingly similar to the requirements of proof of fault and causation under any tort based system.

6. Recommendation two was as follows:

‘The NHS Redress Scheme should encompass care and compensation for severely neurologically impaired babies, including those with severe cerebral palsy.’

The proposal was effectively for a no-fault system for ‘severe neurological impairment related to or resulting from the birth’; however, moral arbitrariness was inevitable in that the proposed scheme excluded ‘genetic or chromosomal abnormality’. Moreover the report did not address disability which was related to antenatal or post partum events, or non-neurological impairment.

7. The other 17 recommendations were wide ranging, consequential, commonsense, unexceptionable provisions. Recommendation 17 is worthy of mention; it was as follows:

‘The costs of future care included in any award for clinical negligence made by the courts should no longer reflect the cost of private treatment.’

This recommendation would effectively repeal the Law Reform (Personal Injury) Act 1948, s 2(4); this statutory provision means that the availability of treatment under the NHS should not be taken into consideration when compensating of the cost of future care. Compensation under common law tort principles is restorative; the effect of this outdated statutory provision is to inflate the cost of compensation.

The NHS Redress Act 2006

8. The preamble of the NHSRA 2006 establishes tort based liability as the necessary condition for obtaining redress:

‘An Act to make provision about arrangement for redress in relation to liability in tort in connection with services provided as part of the health service in England or Wales; and for connected purposes.’

The legislation is concerned exclusively with ‘qualifying liability in tort’ and affirms Parliament’s view that fault based liability should remain the basis of compensation for clinical mishaps; the early proposal for a limited no-fault scheme for brain damaged babies was quietly dropped. The legislation addressed only recommendation one of ‘Making Amends’; the rest were discarded.

9. The statute is important legislation since it potentially affects NHS hospital patients; the intention is to extend its operation to primary care. The underlying policy of the NHSRA 2006 is to provide a genuine alternative to litigation. The Act does not affect any private law rights. It is wholly concerned with the process of compensation; it does not alter the basis of compensation. It is procedural, not substantive.

10. The NHSRA 2006 proposes a redress package where there has been clinical negligence in hospital. The redress package must include: an offer of compensation; explanation; apology; and report of action to prevent similar occurrences. The redress package may include care or treatment. The package can be accepted with waiver of the right to sue, or rejected. The redress scheme is to be run by the NHSLA.

11. The proposed redress scheme is a consensual process, not a judicial process; redress is offered not awarded. Proceeding under the redress scheme is voluntary. Proceedings under the redress scheme and civil legal proceedings are mutually exclusive: they cannot be conducted at the same time. Legal rights are suspended but remain intact during the redress process when legal liability is assessed; legal liability is not adjudicated upon by the scheme’s procedure since it is not a tribunal. Legal rights are only determined if any offer is made and accepted as part of a compromise agreement.

12. The NHSRA 2006 is enabling legislation and the detail of its operation will be set out in regulation. However, indications of its likely operation may be gleaned from Parliamentary debate and in supporting documentation.1 For example, there are indications that:

(1) the scheme proposes that any offer made will be without prejudice, so that if it is rejected it may not be taken as evidence of liability in any legal proceedings;

(2) the upper limit for monetary compensation will be £20,000;

(3) legal privilege will not be asserted in respect of the investigation report.

1. See for example the Explanatory Notes accompanying the Bill, the Explanatory Notes accompanying the NHSRA 2006, and the Full Regulatory Impact Assessment documents accompanying the Bill.

Commentary on the NHS Redress Act 2006

13. The NHSRA 2006 is fundamentally misconceived. Treatment is a matter of patient entitlement, not legal remedy. Out of court settlement should and does happen anyway. The Act’s focus on blame and compensation does not reflect patient priorities.

14. The legislation envisages an integrated one stop shop run by the health service. The health service would investigate itself. The redress scheme is over ambitious, combining incompatible and conflicting functions; it will produce a confusion of processes. It will mix inquisitorial and adversarial, fact finding with fault finding, open with privileged. The opposition proposal that there should be a two stage process for the investigation in the NHSRA 2006 – the first stage an open independent fact finding inquiry; the second stage an in-house privileged fault finding assessment – was unsuccessful. This natural division of procedures would have bestowed functional coherence and efficacy on the investigation process.

15. Since the NHSRA 2006 is concerned with ‘qualifying liability in tort’ any investigation would ordinarily attract legal privilege. The proposed investigation combines fact finding with fault finding without formal separation. Assurances have been given that the investigations will be open and will not be privileged. There is thus a fundamental incoherence between the open investigation of liability and the making of any offer on a without prejudice basis. If a without prejudice offer is accepted then it may be that there are no difficulties in disclosing the investigation report since legal rights have been determined – it may not really matter whether any settlement is made with or without admission of liability. Where an investigation has taken place and an offer is not made or if a without prejudice offer is made and is not accepted, then the applicant’s legal rights are intact. Where legal rights are intact any investigation of liability would ordinarily remain legally privileged according to usual principles. The operation of legal privilege in relation to the investigation report under the scheme is not at all clear.

16. The idea of the NHSRA 2006 is to move away from adversarial attitudes in litigation; yet the Act proposes to provide free legal advice during the redress process. It is an attempt to bolster the credibility of the scheme which lacks independence. It threatens to replicate the problems of the litigation system without the closure and finality of a judicial process. Free legal advice is not to be confined to the end of the redress investigation, in connection with any offer or settlement when legal rights might be determined. Until that point legal rights are suspended – they are neither asserted nor defended.

17. The redress scheme affords a prospect of monetary compensation in an open ended, demand led, risk free, cost free system with free legal advice available. By contrast, any litigation process necessarily imposes some eligibility criteria through the commercial discipline of legal costs, whether by the availability of legal representation or the risk of exposure to liability for the defendant’s legal costs. The redress scheme proposes a free ticket for speculative claims. The then Minister asserted that the ‘vast majority of opportunistic claims [would] be easily rejected’ because payment would only be made where there was there was negligence.1 With respect, it is difficult to see that the requirement of proof of fault and causation can mean that claims under the scheme will be ‘easily rejected’; these requirements present the very difficulties that are at the heart of clinical negligence litigation. In short, the cost of the scheme has not been properly assessed; the problem of assessing eligibility of claims for redress has not been recognised or considered.

1. Jane Kennedy, HC Official Report written answers col 963W (24 April 2006).

18 .The legislation has been generally welcomed for its good intentions, even if its rationale is somewhat muddled, and for acknowledging the problems of clinical negligence litigation; however, it has been widely seen as a wasted opportunity.

[extract from Clinical Negligence, fourth edition (2008); edited by Powers Harris Barton]
 

 
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