In the months ahead while the focus will of course be on how the government navigates Brexit there are other issues which behind the scenes government civil servants will be busy attempting to move forward. The proposed introduction in April, of a state backed indemnity scheme for GPs and the long awaited change to the discount rate are but two such matters. We look here at a few of the key topics in healthcare which could impact on indemnity providers and what can be done to prepare for any change.

    The personal injury discount rate (PIDR) is likely to change from -0.75% to between 0% and 1% by August 2019

    The Civil Liability Act became law on 20 December 2018 triggering the procedure for setting a new PIDR.  The new rate should more realistically reflect how Claimants invest their damages. Following its 2017 consultation the government indicated that the rate was likely to be between 0 and 1%. The MoJ has called for evidence by 30 January 2019 on a wide range of topics relevant to setting the new rate including particular investments available to claimants, investments made by them, investment advice available and model investment portfolios.

    Based on the timescales set out in the Act, the first review will need to commence by 19 March and the new rate will come into effect by 6 August 2019.  Until then reserves must be kept under review and settlement parameters considered on a case by case basis depending on when any trial is likely to take place. In some cases claimants’ representatives may consider settlement now at or close to a multiplier based on 0% PIDR as well as taking a pragmatic approach to accommodation claims and not insisting on the full capital value of the property.

    Duty of care will remain under the spotlight

    In Darnley v Croydon Health Services NHS Trust (2018) the Supreme Court applied existing legal principles to some rather unusual facts and determined that hospital receptionists had a duty not to provide patients with misleading information about waiting times in A&E.

    Situations which at first sight might seem to fall outside the current scope of the duty of care should be reviewed to ensure that risks are fully assessed and appropriate reduction mechanisms put in place. The duty of care was extended in 2018 to include liability for sexual assault by a self-employed occupational health screening doctor (Various Claimants v Barclays Bank PLC, 2017) and to employers for a rogue employee's data breach. The nature of the duty owed by sports team doctors to players could be considered again in the case of former rugby player Cillian Willis, previously of Sale Sharks, due to be heard in the High Court next month. Willis suffered two separate blows to the head during an LV Cup match against Saracens in 2013. He did not leave the field for treatment and on each occasion he alleges that the club medical team allowed him to play on despite suffering a concussion.

    All healthcare professionals and organisations need to ensure that the risks applicable to them individually in their area of professional practice and to any non-medical staff for whom they are responsible are understood in the context of the environment in which they work and reduced to the lowest level possible.

    Risk assessment, patient safety and consent will continue to be the dominant issues around MedTech and telemedicine

    Although new technology and modes of care delivery available to healthcare practitioners are increasing exponentially, risk assessment will still involve familiar concepts which must be got right from the outset. The tragic case of Stephen Pettitt is a timely reminder. He died following mitral valve replacement surgery performed by a surgeon using the Da Vinci robot for the first time. His lack of experience was compounded by his supervisors having left theatre when complications occurred. MVR usually has a 98-99% success rate when carried out as open surgery. The inquest into Mr Pettitt’s death revealed issues around training, supervision and consent. These together with patient suitability for the procedure must all be fully considered as part of the risk assessment process.

    Similar issues could apply to the roll-out of ‘digitally enabled primary and out-patient care’ which the government intends to become ‘mainstream’ following the launch of its NHS long term plan. Remote consulting can involve some unique risks including: lack of prior knowledge of the patient; issues around access to records; information security; loss of valuable information derived from physical examination; adequacy of consent and assessment of capacity and reliance on online questionnaires in a situation where negatives are often as important a factor in diagnosis as positives. In a nutshell providers and indemnifiers will need to be confident that robust governance procedures are in place to deal with the risks that remote consulting entails.

    Preparation will be key to managing risk around the new Clinical Trials Regulation

    EU Clinical Trials Regulation 536/2014 is likely to be implemented in 2020 during the transition period after Brexit and will be incorporated into UK Law. It represents a major change in the clinical trials process for investigational medicinal products because of more stringent governance requirements. The government has confirmed its intention to remain aligned with the CTR even in the event of a no-deal Brexit.

    Organisations involved in clinical trials need to start reviewing their policies and procedures now. Issues around consent are likely to be challenging as the CTR requirements for informed consent are not identical to those introduced in the GDPR which gave enhanced protection to health data. Those undertaking clinical trials will need to review their policies for obtaining consent against the CTR, reconcile them with their data protection policies and ensure both also meet the requirements of the GDPR. The extent of the GDPR’s reach to co-sponsors will also need to be factored in alongside the enhanced rights of data subjects to withdraw consent at any time, request deletion of data and be ‘forgotten’.

    Steps are likely to be taken to control the rising cost of clinical negligence claims

    This year the cross-government strategy for controlling the costs of clinical negligence claims should be published and the shape of the Fixed Recoverable Costs scheme for lower value clinical negligence claims should be known. The introduction in 2013 of on-line portals for Employers’ & Public Liability claims valued at up to £25,000, reduced costs significantly by setting a framework for claims handling with a fixed fee for various stages of the process. It is likely that clinical and dental negligence claims of low value will be brought into a similar regime, the main area of debate being the value of claims to be subject to FRC. The lobby for reform of the s.2 Law Reform (Miscellaneous Provisions) Act 1948 enabling recovery of private medical treatment costs despite NHS treatment being available continues to grow. All three initiatives plus a reduction in the discount rate are crucial to a long term solution to curbing rising claims inflation.

    The basis of GP indemnity will be changing, but is unlikely to solve the indemnity crisis

    What remains of the current GP indemnity scheme is likely to be as significant as the form of the new one. A year on from the Department of Health and Social Care’s announcement of its intention to introduce a state-backed indemnity scheme (SBIS), the devil is still in the (yet to be published) detail. As the scheme will only cover clinical negligence liabilities for NHS work, GPs will still need to take out additional cover for non-NHS work and (as now) for legal representation for inquests, criminal or GMC investigations and for ‘good Samaritan’ acts. 

    Recent media reports suggest that SBIS will provide practice-based rather than individual indemnity and that contributions will be made via ‘top-slicing’ of practice income. Although practice-based cover would include all healthcare professionals and in the case of a claim remove the need for expensive contribution arguments, where does this leave GPs who do not wish to join?

    SBIS may mean lower indemnity costs and a reduction in departures from general practice, but it is unlikely to solve the problem of clinical negligence costs consuming a growing proportion of the NHS budget.

    Calls for a ‘joined-up’ approach to NHS and independent sector governance and for the ‘indemnity gap’ to be plugged are likely when the Paterson Inquiry reports in summer 2019

    The report of the Inquiry into jailed breast surgeon Ian Paterson is likely to identify cross-sector governance issues at the crux of why his criminal activity went undetected for so long. The Inquiry’s terms of reference make it clear that a ‘joined-up’ approach to safety, learning and quality of care is needed to prevent such a tragedy happening again. Communication, referral paths between the sectors, data sharing, multi-disciplinary working, management of performance issues and adequacy of response following adverse incidents and clinical recall are all under scrutiny.

    The gap between NHS and private indemnity (where criminal activity can invalidate a policy) was felt to have delayed settlement of claims by Paterson’s private patients. There have been calls for the gap to be plugged and the government has launched a consultation on appropriate indemnity cover for healthcare professionals who purchase their own cover because they are not part of any existing or proposed state-backed scheme. The consultation closes on 28 February 2019. If in future insurers are obliged to cover damages claims arising from criminal activity, underwriters should ensure a comprehensive risk assessment is carried out. This will need to be based on review of hospital working arrangements and governance and performance management policies.

    Inquests may become more trial like and there may be a further change in the standard of proof

    If public funding is extended to all bereaved families as requested by some pressure groups, inquests are likely to become more adversarial rather than inquisitorial as both parties are likely to be represented. In 2018 a change in exceptional case funding for article 2 inquests (unnatural death or suicide of a person detained in prison, a mental health unit or police custody) marked the first step in the government’s wide-ranging review of public funding for all inquests.

    In Maughan (2018), the standard of proof for a suicide conclusion at an inquest was changed from the criminal to the civil basis. The impact of the decision remains to be seen, it leaves unlawful killing as the only inquest conclusion which must be proven to the criminal standard. This is in contrast to other quasi-criminal determinations, for example Family Court cases involving injury to a child, which are decided on a balance of probabilities. The Maughan decision has been appealed, but if upheld, unlawful killing conclusions may be vulnerable to a challenge to adopt the civil standard. A change could lead to an increase in the number of patient deaths investigated by regulators and the police.

    Data breaches will not only attract larger fines, but claims for damages are likely to become more prevalent

    The Information Commissioner’s appetite for using her enhanced power to fine is likely to become apparent in 2019. In May 2018 the GDPR increased the maximum fine for data breach to €20 million or 4% of annual global turnover, whichever is higher. None of the ICO’s 2018 investigations involved a post GDPR data breach.

    Following the Court of Appeal decision in WM Morrison Supermarkets PLC v Various Claimants (2018), claims for damages for data breach are likely to become more prevalent. The Court confirmed that the supermarket chain was liable for a rogue employee who leaked the payroll information of thousands of employees, despite the data breach being perpetrated from the former employee’s home. His actions were considered to form a seamless sequence of planned events starting at work. Morrisons have indicated that they intend to appeal to the Supreme Court.

    Separately, news of the hacking of Marriott’s reservation database, believed to contain details of 500 million hotel guests, illustrates the size of the potential risk to anyone holding large amounts of data.

    These two cases show that claims could run into many millions of pounds. All organisations, particularly those with clients worldwide, for example professional sports clubs, will need to manage their exposure to the risk of damages claims. The Morrisons decision provides an opportunity for insurers as most organisations will decide to manage their exposure by insuring against the risk. However, the impact is likely to be greatest for say a small charity unable to afford insurance, where a claim could threaten its future survival.

    For further information and to discuss any of the topics in this publication please contact Majid Hassan, David Roberts or Tracey Lucas.