Friday, 11 January 2013

Repeal of the Law Reform (Personal Injuries) Act 1948

On the Radio 4 Today program on 11 January 2013, in response to a recent settlement of a clinical negligence claim for a child with cerebral palsy in the sum of £7.1 million (in fact it was a periodical payment order and therefore the total damages may turn out to be more or less than that sum), Christine Tomkins, Chief Executive of the Medical Defence Union, questioned whether the Law Reform (Personal Injuries) Act 1948 was sustainable given the large cost to the NHS (and presumably to insurers such as the MDU) of compensation payments.

In an article in The Independent in December 2012, Christine Tomkins was also quoted as saying:

"Today claims for babies damaged at birth may cost up to £6m. Money is pouring out of the NHS to set up 'one-patient institutions' when it could be retained in the NHS."

The article reported her as arguing that the law required that the cost of future care in such cases be calculated on the basis that it would be provided privately, rather than on the NHS. The rule, she claimed, was established under the 1948 Law Reform (Personal Injuries) Act – before the NHS became established. Again she was quoted:

"Why must you disregard NHS care [in calculating the size of a settlement]? It was understandable in 1948 when no one knew how long the NHS would last or how comprehensive it would be. But it doesn't make any sense today when the NHS often delivers the best care."

This is a thought-provoking analysis. What would be the consequences of a repeal?

The 1948 Act

Section 2(4) of the Act provides that:
"In an action for damages for personal injuries ... there shall be disregarded in determining the reasonableness of any expenses the possibility of avoiding those expenses or part of them by taking advantage of facilities available under the NHS."

It does not follow that a claimant will be awarded the costs of private provision even if he is likely to use the NHS - Harris-v-Brights Asphalt Contractors Ltd [1953] 1 QB 617, Woodrup-v-Nicol [1993] PIQR Q104. It must be likely that he will actually incur the costs for them to be recoverable. Thus if parents of a child with cerebral palsy were satisfied that the NHS would deliver the best care to their child for the remainder of its life, then they would choose to rely on the NHS and the court would not award compensation for private provision. In fact nearly all parents with a choice, choose private provision.

The Courts' Approach

How do the Courts approach these cases? In Whiten-v-St George's Healthcare NHS Trust [2011] EWHC 2066 (QB) Mrs Justice Swift stated that "The claimant is entitled to damages to meet his reasonable needs arising from his injuries. In considering what is "reasonable", I have had regard to all the relevant circumstances, including the requirement for proportionality as between the cost to the defendant of any individual item and the extent of the benefit which would be derived by the claimant from that item."

A claimant can only claim the reasonable costs of care, equipment and therapies which are reasonably required because of the injuries sustained. Nevertheless, the 1948 Act provides that in determining reasonableness, the availability of NHS provision should be disregarded.

Consequences of Repeal

Even if s2(4) of the Act were repealed a court would still compare the quality of the proposed private provision and the proposed state provision. It would also have to consider to what extent the quality and extent of future state provision could be guaranteed. If the claimant requires 24 hour care within his or her own home, what would the NHS provide? Would it provide suitable equipment, nursing care, therapies, accommodation, transport etc.? And would it guarantee to do so for the remainder of the claimant's life?

Furthermore, NHS provision of 24 hour care in the Claimant's own home is not cost free. It would cost the state a great deal of money. The cost to the state of a claim for compensation of £7.1 million, is not £7.1 million more than the cost to the state if the NHS itself provided the care, equipment etc. required over the whole of the injured person's life. Indeed, since the government seems keen on contracting out services to the private sector on the basis that the private sector can provide services more efficiently, why should we assume that the NHS would provide the necessary care at lower cost than the private sector?

So upon repeal of the 1948 Act, if the defendant were the NHS itself, then a costs comparison would inevitably be made - would the NHS be able to provide the same (reasonable) quality of care, accommodation and equipment as the private sector and at what cost?

Further, surely the government would not want to repeal the Act for all claims. To do so would allow any defendant, including insured motorists, to avoid paying compensation by saying that of course the private provision is disproportionate because the claimant can get the same provision for free through the NHS. That might lower the compensation awards, but it would simply shift the burden from insurers to the state.

The MDU is not "the state", so repeal of the Act would be particularly advantageous to its members if not to the taxpayer.

"One-patient institutions"

Christine Tomkins refers to injured persons' homes as "one-patient institutions". I don't know whether the intended implication is that to save costs, injured persons should be cared for in multi-patient institutions, or that repeal of the 1948 Act would lead to that result. If so, then perhaps that outcome would indeed save costs. Indeed for a very few claimants it may actually be in their best interests to be cared for elsewhere than in their own home. But for most it will be in their interests and it will be their wish to remain at home. Had they not been negligently injured these individuals would have been able to benefit from family life at home. If they have the capacity to benefit from home life is it right that they should then be deprived of the choice to live at home in order to save costs (if indeed it would save costs)?

There is no doubt that the cost to the NHS and doubtless the MDU of compensation payments for patients seriously injured by negligent treatment has risen. It may be that the burden has risen as more children have survived severe peri-natal brain injury, and have survived for longer. Perhaps more families are aware of their entitlement to claim compensation than used to be the case. A wider range of, sometimes expensive equipment is now available to assist severely injured persons. Perhaps lawyers and experts have learned more about the true costs of caring for a seriously injured person and are claiming now for a wider range of provision. But whatever the reasons for the increases in the compensation bill, is it clear that repeal of the 1948 Act would be the answer?


  1. That was really very useful information, Thank you..!!

    Medical negligence involving children come under Pediatric compensation claims. The compensation is generally received by the parent or guardian of the child. Common pediatric claims include: Brain damage caused due to improper treatment in the pregnancy of the mother, Improper treatment of leukemia, failure to diagnosis ..

    Many people have suffered illness or injury as a result of the treatment given to them by doctors or hospital staff and I'm one among them who have not acted properly. Later through various sources I came to know that these cases can be covered in clinical negligence compensation:

    Incorrect diagnosis
    Incorrect treatment
    Important symptoms ignored
    A delay in diagnosis or treatment
    Failure of a medical product or device

  2. If only the NHS could provide the care required - an acquired brain injury in a child, for instance, following a catalogue of errors - parents are not offered respite care, child has 24/7 care needs - parents foot bill of moving house, adaptations, not being able to work, losing full time job in city, etc. The appalling lack of support is what needs to be addressed before the law is changed here - that is what is not 'fair'. I agree all people should receive the level of care they need, whether injured through negligence or through another event - but that doesn't happen now and to deny it in the most appalling of circumstances to families is entirely out of touch with the realities of living with a profound disability.