PIBULJ Editorial August 2006

By Tim Kevan and Duncan McNair

Abraham Lincoln said in 1850:  "Discourage litigation. Persuade your neighbours to compromise whenever you can. Point out to them how the nominal winner is often a real loser -- in fees, expenses, and waste of time. As a peacemaker the lawyer has a superior opportunity of being a good man. There will still be business enough.” 

This is perhaps more pertinent today than ever before and an example of a government initiative designed to tackle this is the NHS Redress Bill, the implications of which are worth considering at this stage.  The Bill provides for the establishment of a scheme to enable the settlement, without the need to commence court proceedings, of certain claims that arise in connection with hospital services provided to patients as part of the health service.  Currently, this scheme will only apply to claims under £20,000 although it is likely to be argued that it should be extended to all claims for clinical negligence in the future as it promises significantly to reduce costs if implemented effectively.

Significantly, the legislation allows part of the settlement to include contracts for future remedial care that is needed, alongside financial compensation.  This is important since currently litigants are entitled as of right to claim for the cost of private provision of care (under section 2(4) of the Law Reform (Personal Injury) Act 1948).  Again, it may be argued in the future that consideration should be given to repealing this section in relation to claims against the NHS and instead enabling the NHS to offer their own care packages for the future.  This, in the long term, may ultimately bring down costs with the NHS providing those services it can cope with, and contracting the others in from the private sector.

However, what is perhaps most interesting about the whole initiative is that in setting up the system for the Redress Bill, the government considered other alternative systems of compensation.  In Sweden, for example, a no-fault system of compensation operates for clinical negligence cases.  This was considered although ultimately dismissed on the basis that it would probably increase the overall costs due to an increased number of claims.  It remains to be seen whether alternative schemes will be devised to try and cut out the costs to society of personal injury litigation as a whole but one imagines it is only a matter of time before measures are considered.  An obvious private sector initiative which many still hark back to as the answer to disproportionate litigation is the old ‘knock for knock’ system.  Further they can point to the fact that if insurers and credit hire companies were able to arrive at bulk settlements, then it is all the more so that insurers should be able to do the same between themselves…and so the debate rolls on.