/News

October 3, 2023

The cap fits – fixing the costs problem

Regulation

Will Marshall, Head of Legal & Risk Management

The cap fits – fixing the costs problem

The UK government is introducing a fixed recoverable costs regime for clinical negligence cases, known as the Lower Damages Clinical Negligence Claim Fixed Recoverable Costs (LDFRC) scheme.

This scheme will apply to most clinical negligence cases in England and Wales that are valued between £1,501 and £25,000 and is set to take effect in April 2024.

The application of fixed costs for clinical negligence cases has been divisive. The Government's proposals have faced criticism from claimant representatives but gained support from healthcare providers and insurers. The proposed changes represent a significant shift in the law, expected to substantially reduce legal claim costs in lower-value clinical negligence cases. They will particularly benefit non-surgical independent sector practitioners including dentists, pharmacists, aesthetic practitioners, and allied health professionals, who commonly face claims that result in damages below £25,000. As Claimant legal fees often exceed damages in this category of claims, it is hoped that the new scheme will significantly lower costs for providers and insurers.

Key Takeaways:

1. The scheme will apply to most clinical negligence cases valued between £1,501 and £25,000 and is set to take effect in April 2024.

2. The primary goal of the scheme is to control disproportionate claimant legal costs in low value cases.

3. The introduction of the LDFRC scheme will be accompanied by a new legal protocol, designed to streamline pre-action proceedings and facilitate early settlement.

4. Under the new fixed costs framework, claimant costs will be determined based on damages awards, preventing disproportionate costs in relevant cases. This will provide clarity for health and care providers and their insurers when assessing their costs liability for claims valued at up to £25,000.

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