New Personal Injury Discount Rate set at minus 0.25%

On 15 July 2019, the Lord Chancellor announced the outcome of the long-awaited Personal Injury Discount Rate review. The new discount rate will be minus 0.25% and will come into force on 5 August 2019. Following the reduction in the discount rate from 2.5% to minus 0.75% in February 2017, a new framework for review was created by the Civil Liability Act 2018 (‘the Act’). Claimants were to be treated as ‘low risk’ rather than ‘very low risk’ investors and the principle of 100% compensation was to be preserved. The process required the Lord Chancellor to consult with the Government Actuary and HM Treasury and consider: actual returns and investment available to Claimants; the appropriate allowances for tax, inflation and investment management costs; and wider economic factors. 

Under the Act the government must review the rate again within a 5 year period, to ensure that it remains appropriate. The next review will be conducted using an expert panel. 

Comment: Compensators will need to review reserves on all large claims with a future loss element and carefully consider claims where offers remain open. The new rate means that the value of future accommodation claims based on the Roberts v Johnstone formula remains at zero. Uncertainty leading up to the current decision was apparent in settlements negotiated at between o.5% and 1%. The view of many commentators is that at the next review there is a real possibility that dual rates will be introduced. This would involve a lower short term followed by a higher long term rate after a switchover period. For now it remains to be seen if insurers look to challenge the current rate via a judicial review. 

Recovery of cost of commercial surrogacy abroad

In XX v Whittington Hospital NHS Trust (2018), the Claimant had become infertile due to the Defendant’s admitted negligence. She claimed commercial surrogacy costs in the USA, but this part of her claim was deemed irrecoverable in the High Court as commercial surrogacy is illegal in the UK. Her appeal was successful. The Court of Appeal acknowledged that the business of commercial surrogacy is illegal in the UK, but determined that XX herself did not propose to do anything unlawful and she was able to recover the cost of a US commercial surrogacy arrangement.

Comment: The Court of Appeal declined to follow its decision in Briody (2001) as it considered that social attitudes towards surrogacy had changed and the law no longer required a bar on public policy grounds. The Defendant is appealing the decision to the Supreme CourtRead NHS Resolution’s case note

Medical Malpractice Liability

Informed consent: causation and hindsight

Diamond v Royal Devon & Exeter NHS Foundation Trust (2019) involved a 2011 post spinal surgery mesh hernia repair. The surgeon (W) did not advise Ms Diamond about the option of suture repair which had a higher risk of failure, or ask her if she intended to become pregnant in future. In 2014 the Claimant consulted another surgeon when she had recently commenced a new relationship. He told her mesh repair carried a risk if she became pregnant. She brought a claim against the Trust alleging lack of informed consent and at trial W was found to be in breach of duty. On causation, the Claimant contended that had W warned her of the pregnancy risk she would have elected for suture repair. However she conceded that in 2011 she was single and not in a relationship and that pregnancy was not within her immediate contemplation. Judgment was given for the Defendant on the basis that the Claimant would have gone ahead with the mesh repair in any event as it would have been irrational for her to elect for suture repair in 2011. In dismissing her appeal, the Court of Appeal accepted that the judge had followed the Supreme Court decision in Montgomery. He had taken account of both a reasonable person in the Claimant’s position, but had also given weight to her own characteristics. 

Comment:  This is an interesting and important case as it deals with the effect of hindsight on causation in consent cases. The trial judge had found it ‘quite impossible’ for the Claimant to divorce from her thinking the fact that she was told in 2014 that it would be inadvisable to have another child. This outcome had coloured her view of what she would have done in 2011, had she had the appropriate warning.

Claimant given immediate custodial sentence for making false statements

In George Eliot Hospital NHS Trust v Elder (2019) the Claimant was found to have made deliberate and persistent false statements verified by statements of truth. In a quantum only matter she sought in excess of £2.3 million in damages claiming that as a result of negligent surgery she had unremitting pain and restricted movement to the extent that required walking aids and was reliant on others for help with everyday tasks. At trial she was found to be more mobile than she claimed, able to drive, carry her grandson and shop without assistance and participate fully in family events including flying abroad. She was awarded £120,000. Subsequently, she admitted dishonesty but then sought to resile from the admission. She was held to be in contempt of court and given an immediate custodial sentence for 5 months.

Comment: This is believed to be the longest prison sentence for contempt of court arising from dishonesty in a personal injury claim. It shows that the courts are prepared to come down hard on anyone who seeks to defraud the NHS. In this case the judge was particularly concerned that the Claimant’s lies permeated her own statements and evidence she had given to experts and to the court. The contempt was made more serious by the extent of the exaggeration, c. £2 million. Read NHS Resolution’s case note

General Liability

A boundary to the doctrine of vicarious liability?

In Shelbourne Cancer Research UK (2019), the Claimant suffered a serious back injury at a Christmas Party organised by the Defendant (her employers), when she was lifted and dropped to the floor by another attendee. The court considered that an adequate risk assessment had been undertaken by the Defendant which was held not to be in breach of its duty to her. The central issue was whether it was vicariously liable for the actions of the person who dropped her. He was a visiting scientist who was collaborating with the Defendant on a joint project and the High Court determined that the incident was not sufficiently connected with his research work for vicarious liability to arise.

Comment: The important distinction here is the connection between the scientist’s work and the Defendant’s business on the one hand and his work and the incident on the other. The former are likely to have been integral to each other, potentially giving rise to vicarious liability, whereas the latter were not. The Supreme Court will be considering the boundary between an incident and an employee’s field of work in the Morrisons case where the Court of Appeal held that an employer was liable for the actions of a ‘rogue’ employee. Read Capsticks insight on the case


Prevention of Future Death reports: Westminster Bridge terror attack inquests.

Capsticks represented London Ambulance Service NHS Trust in the inquests concerning the terrorist attack on Westminster Bridge on 22 March 2017. The inquests were heard in September and October 2018 before the Chief Coroner, into the deaths of the 5 victims and the attacker (the latter heard with a jury). There were numerous ‘interested persons’ and the inquests were very high profile with sensitive issues and evidence. A number of paramedics who attended the scene were required to give evidence. Issues included the emergency services’ response, how to declare a major incident and the practice of covering the bodies of those who have died in a public place. The Coroner considered LAS policy on major incident declaration to be ‘prudent’ and while acknowledging the families’ distress, accepted that proper consideration had been given to the dignity of the deceased, preservation of the crime scene and prioritisation of paramedic assistance.

Comment: LAS was the only organisation involved in the inquest against whom a PFD report was not made. The importance of robust processes for Serious Incident Investigation which demonstrate that safety and learning issues have been addressed cannot be overstated. The evidence will go to the root of whether the Coroner considers that a PFD report is necessary.  

No extension of legal aid for inquests

The government has issued a final report following its long-anticipated review of legal aid for inquests. Non means-tested legal aid will not be introduced. However the evidence submitted will be used to review the thresholds for legal aid entitlement. Furthermore, the government has signaled a number of intentions around support for bereaved families and the inquest process itself.

Comment: Healthcare organisations are likely to have seen an increase in the number of inquests where the bereaved are represented following the Lord Chancellor’s 2018 guidance changing the way legal aid for representation for families at Article 2 ECHR inquests (where deceased has been detained or is in custody) is decided. Ensuring staff are supported and preparing thoroughly for the inquest will continue to be vital. Read our in-depth Insight into the report

Clinical Law

Telling patients the truth when something goes wrong

The Professional Standards Authority has published a report evaluating the progress of professional regulators regarding the duty of candour. The PSA considers progress to have been made, but felt it was difficult to establish the extent of the regulators’ success in encouraging candour. This was because success was both hard to measure and the range of factors which affect professionals’ candour to patients. The report concludes that cross-sector collaboration between organisations and individuals is needed to produce professionals who are candid and work in supportive environments.

Comment: Embedding the duty of candour in a healthcare organisation is essential not only to meet regulatory standards and professional duties but according to recent research

by NHS Resolution are important, together with transparency and saying sorry, in determining whether an incident becomes a claim. NHS Resolution has published guidance on saying sorry and the duty of candour.

On the horizon

Fixed Recoverable Costs latest

Earlier this year the MOJ ran a consultation on extending FRC. Its response is awaited. The consultation included a proposal to create a new ‘intermediate track’ and corresponding FRCs for ‘less complex claims’ with a value up to £100,000. The consultation did not include clinical negligence claims as the MoJ had already tasked the Civil Justice Council with devising a bespoke process and FRCs for cases up to £25,000. On 27 March 2019 in response to a written question, the Minister for Health and Social Care stated that the report was due ‘shortly’ and that the government will consult before implementing any extension.

Comment: The introduction of FRCs (which were original envisaged by Sir Rupert Jackson as covering all claims up to £250,000) is a key plank of the government’s strategy to reduce the increasing cost of claims. Increases have been particularly stark in clinical negligence and in 2017 the NAO challenged the government to devise a plan to manage those costs. In clinical negligence costs are often particularly disproportionate in the more modest value claims and it is hoped that FRC together with the increase in the discount rate will reverse the upward trend.

Paterson Inquiry report delayed

Publication of the report into safety and learning following the conviction of breast surgeon Ian Paterson is likely to be delayed to the end of the year. This has occurred due to the numbers of former patients still coming forward including, it is understood, some who were not involved in the criminal or civil cases. 

Comment: The report will be a key piece of safety and learning for both private sector providers and the NHS. The inquiry’s terms of reference include sector comparisons on accountability for safety and quality of care, multi-disciplinary working and responsibility for adverse incidents and clinical recall. However, perhaps most crucially, the inquiry will consider cross-sector information sharing to prevent recurrence.