On 8th May 2024 the government published its response to the consultation on disbursements (i.e. costs incurred that are not ‘profit costs’ in accordance with the relevant costs rules) within the proposed new Lower Damages Clinical Negligence Fixed Recoverable Costs (LDFRC) Scheme. 

This followed a wider consultation on the introduction of LDFRC to which the government responded on 15th September 2023 (fixed-recoverable-costs-consultation-response.pdf (publishing.service.gov.uk)).  

The proposed new Pre-Action Protocol for the Resolution of (low value) Clinical Disputes and accompanying LDFRC, in summary, will apply to claims where the date of notification of the claim falls on or after the date the new scheme comes into force, which is currently unknown. The Scheme will include clinical negligence claims where the value at settlement or following judgment is between £1,500 and £25,000, unless a specified exclusion applies, and covers pre-issue costs only. The specified exclusions include when a claimant is a litigant in person, the claim involves a stillbirth or neonatal death, where there are to be more than 3 medical experts addressing breach of duty and causation, the Defendant raises limitation as an issue or where there are 2 or more Defendants and the allegations of negligence against them are materially different (see section 5.7 of the 15th September 2023 response). Claims within the Scheme will either proceed on the light or standard track, with different fixed costs applying to each. 

 One of the criticisms of this initial consultation was that the position on recoverable disbursements was not made sufficiently clear, hence the more recent consultation on disbursements, which ended on 22nd December 2023. In its Response (Fixed recoverable costs in lower damages clinical negligence claims – a supplementary consultation on disbursements: government response – GOV.UK (www.gov.uk)), the government has indicated its plans regarding recoverable disbursements within the Scheme.  

 Both responses and their proposals are well worth a read for the clinical negligence practitioner. 

 The government’s proposal was the following approach to disbursements in the LDFRC: 

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)’ 

 Consultation Response 

As a result of the Response, proposal a. remains unchanged, but there have been some modifications to b. and c.  

It has now been confirmed that the LDFRC will allow for recovery of the court fees for a Part 8 application for pre-action disclosure. This should hopefully allow parties to progress their claims in a ‘timely manner’ by allowing them to obtain the evidence necessary to progress their case. 

Further, where there is a looming limitation deadline, the government acknowledges that applications for a stay are a necessary part of the process in a claim issued due to limitation risks. The rules will specify that court fees for both issuing proceedings and applying for a stay are recoverable when proceedings are issued because a limitation period is shortly to expire. 

The wording of the rules regarding disbursements for expert fees will be written in such a way so as to include the ‘associated costs of engagement with the claimant and their legal representatives in the production of the report’, as well as the cost of the report itself, which is useful clarification. Currently, the government does not propose to introduce caps for either expert fees, or the costs of ATE premiums, but these will be monitored as part of reviews once the LDFRC Scheme has been implemented.  

Where the claim involves protected parties and/or children, then the government’s proposal is that disbursements for counsel’s and court fees relating to Part 8 approval hearings should be recoverable separately. 

The Scheme will NOT include inquest costs in claims to which it applies. The recoverability of such costs will be the same as they would be in clinical negligence claims not subject to the LDFRC, which brings the position into line with the recent changes to other FRC rules. 

In respect of counsel’s fees more generally, those incurred during the pre-action phase will not be separately recoverable. The Response’s conclusion is that counsel’s advice was ‘rarely needed’ and would not be appropriate in the pre-issue phase of the LDFRC cases where children and protected parties are not involved. The government was ‘unconvinced’ that the need for counsel’s advice in the lower damages value bracket was sufficiently strong to allow its recoverability as a disbursement in all claims in this scheme. 

My personal experience is that while counsel’s involvement often comes after the Letter of Claim and Response have been exchanged, counsel can offer valuable assistance when it comes to consideration of the nuances of an expert’s report in the pre-disclosure and pre-issue stage, in terms of forming the case to be pursued, and also in relation to the assessment of quantum. 

Much will depend on the quality of the expert report. As an example, some reports identify breaches of duty, but do not link this to any particular causative outcome. Conferences with experts and counsel can ensure breach and causation are fully and properly addressed in the reports and can identify strengths and weaknesses in a claimant’s case that will likely have an impact should the claim proceed to issue and/or on settlement proposals. I have found that just because a case has a value at under £25,000 does not necessarily mean it is any less complex than a case with a value of £25,001. 

Regarding quantum, clinical negligence claims rarely fall squarely into the brackets of the Judicial College Guidelines. Assessing damages for PSLA can be tricky even when the claim is relatively low value, due to the wide-ranging nature and effects of injuries arising from negligent medical care. 

Normally, it is a matter for a representative acting under a FRC scheme to determine how they allocate their fixed costs, including incurring counsel’s fees. Given that the Scheme envisages the service of expert reports at the time of sending the Letter of Claim (on the Standard Track), it is likely to result in a significant change in the way that cases are prepared, and decisions will need to be taken as to how best to spend the limited fixed costs available. 

The Response confirms that the Scheme will not make an allowance for other types of disbursements to be recoverable. Claims will and should involve pagination of evidence bundles, but the government believes that this can be achieved without classifying that as a disbursement or allowing for it to be recoverable. 

The Response goes on to state that translation or tracing services should not be separately recoverable as disbursements, being as they are not ‘often integral to lower damages claims in the pre-issue stage’. Claimant representatives with clients who speak or read little English and who have valid clinical negligence claims may take issue with this conclusion, particularly given the importance of translation for access to justice. The Response does indicate that the use of disbursements will be monitored as part of the post-implementation review, so this may be subject to change. 

The Disbursement Proposals 

The government’s amended proposals are therefore: 

  • ‘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’ 

The Response notes that it was originally intended that the LDFRC Scheme was to come into force in April 2024, and this has obviously not happened. The intention is now that the rules will be drafted and come into force for October 2024. It remains to be seen whether this in fact will be the case. 

For those dealing with low value clinical negligence claims, this is very much something to keep on your radar.