Mdu Welcomes Plans To Reform Legal Costs In ‘No Win No Fee’ Cases

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The announcement by Justice Secretary Ken Clarke that the Government intends to reform the civil justice system, and in particular conditional fee agreements (CFA) also known as ‘no win no fee agreements’ which have led to excessive and disproportionate legal costs*, has been warmly welcomed by the Medical Defence Union.

The current situation under which costs can far exceed the compensation awarded to the damaged patient could not be allowed to continue

The announcement by Justice Secretary Ken Clarke that the Government intends to reform the civil justice system, and in particular conditional fee agreements (CFA) also known as ‘no win no fee agreements’ which have led to excessive and disproportionate legal costs*, has been warmly welcomed by the Medical Defence Union.

Sharmala Moodley, Deputy Head of Claims at the Medical Defence Union (MDU), the UK’s leading medical defence organisation, said:

“We are delighted by the Minister’s announcement that the Government intends to implement the recommendations made by Lord Justice Jackson in his report on civil legal costs. The reforms will address the excessive and very often disproportionate costs claimed under ‘no win no fee’ agreements, while ensuring patients can still seek compensation if they have been negligently harmed. The current situation under which costs can far exceed the compensation awarded to the damaged patient could not be allowed to continue. For example the MDU has settled a claim where the patient’s damages were agreed at £8000 however their lawyer’s costs totalled £62,000 which included a 90% success fee and an ‘after the event’ (ATE) insurance premium.

“Such spiralling costs are not only shouldered by our doctor and dentist members through their subscriptions but by taxpayers who are funding NHS cases. The announcement that the NHS paid £312m in damages and £456m in lawyers' fees in 2008-9 is truly startling and illustrates the urgent need for reform of the system.

“We agree with the plans to change the way success fees are recovered so that claimants themselves will be expected to fund their solicitors’ success fee from any damages awarded and will then have an interest in the costs incurred on their behalf. We also support the plans under which defendants will not recover costs from losing claimants in CFA-funded cases and in return claimants won’t need to take out ATE insurance against these costs. With the plans to increase general damages awards to claimants by 10 per cent, we think this strikes the right balance.

“We are also interested to see the consultation on settling disputes in county courts which proposes a fast track scheme for low value NHS Litigation Authority claims. Although this will not include our GP members initially, we will be responding on their behalf.”

Further information
*Clarke stamping out compensation culture fears: ‘no win no fee’ revamp and major overhaul of civil justice. Ministry of Justice news release, 29 March 2011

The MDU is a mutual, not for profit, organisation owned by our members who include over 50 per cent of the UK’s hospital doctors and GPs. Established in 1885, the MDU was the world's first medical defence organisation. We defend the professional reputations of our members when their clinical performance is called into question. Our benefits of membership include insurance* for claims of clinical negligence and a wide range of medico-legal advisory services.

Contact Susan Field or Dawn Boyall in the MDU’s press office on T: 020 7202 1535/1504, M: 07773 772816
E: fields(at)the-mdu.com boyalld(at)the-mdu(dot)com
http://www.the-mdu.com

Follow on Twitter @The_MDU

MDU Services Limited (MDUSL) is authorised and regulated by the Financial Services Authority in respect of insurance mediation activities only. MDUSL is an agent for The Medical Defence Union Limited (the MDU). The MDU is not an insurance company. The benefits of membership of the MDU are all discretionary and are subject to the Memorandum and Articles of Association.

MDU Services Limited is registered in England 3957086. Registered Office: 230 Blackfriars Road London SE1 8PJ.

  • Insurance co-underwritten by SCOR UK Company Limited and by International Insurance Company of Hannover

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Susan Field
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