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No Fault Compensation Review Group Report and Recommendations Volume I Commissioned by The Scottish Government St Andrews House Regent Road Edinburgh EH1 3DG Foreword We were asked by the Cabinet Secretary for Health and Wellbeing to consider the potential benefits for patients in Scotland of a no fault compensation scheme for injuries resulting from medical treatment, and whether such a scheme should be introduced alongside the existing clinical negligence arrangements. Our report sets out the approach we adopted together with our findings, conclusions and recommendations which we hope will be helpful and inform consideration of what is required to ensure that the compensation scheme in operation in Scotland meets the needs of those involved. This is an extremely complex area and there are, of course, a wide number of interests at stake. The Review Group has been fortunate to have representation from many of these interested parties in its membership and I have been impressed with the commitment and enthusiasm that members have shown throughout our deliberations and I am extremely grateful for this support. We adopted a strategy which proactively utilised the unique expertise of members to inform both our discussions and the development of our recommendations. We were also fortunate to be able to consult other experts as and when this was appropriate and I am also happy to acknowledge this assistance which was immensely helpful to us. The original report was submitted in November but did not include costings for the introduction of a no-fault scheme. The research team has now provided advice, and the report offers comments on this in Chapter 7 paragraph 7.14. Finally, my sincere gratitude to the secretariat as a whole, and Sandra Falconer in particular, should be recorded. Their professionalism and support were outstanding, and Sandra was immensely helpful in putting together the final report. Professor Sheila A.M. McLean, LLB. MLitt, PhD, LLD, LLD, FRSE, FRCGP, F Med Sci, FSB, FRCP(Edin), FRSA International Bar Association Professor of Law and Ethics in Medicine Chair 15 February 2011 2 Content Page Summary of Conclusions and Recommendations 5 Chapter 1 9 Introduction and background Remit Approach Chapter 2 12 Evaluation of the current compensation system Evaluation of the system and proposals in England Evaluation of the proposals in Wales Evaluation of existing No Fault/No Blame systems in the UK Chapter 3 25 Evaluation of existing No Fault systems in other jurisdictions Chapter 4 36 Analysis of principles No Fault liability and the European Convention of Human Rights (ECHR) Chapter 5 42 Options considered Chapter 6 50 Additional considerations Chapter 7 55 Conclusions and recommendations Appendices 59 Appendix A Review Group membership Appendix B A Limited No Fault Scheme Appendix C List of evidence considered Appendix D Definitions Research Reports published separately: Volume II - No Fault Compensation Schemes for Medical Injury: A Review Volume III - An empirical study of medical negligence claiming in Scotland 3 For further information please contact: Sandra Falconer Scottish Government Health Directorates Patient Support and Participation Division Ground East Rear St Andrews House Edinburgh EH1 3DG Tel: 0131 244 2399 E-Mail: email@example.com Fax: 0131 244 2989 Acknowledgements We are extremely grateful for the assistance provided during the course of our work by: Professor Jim Murdoch, Professor of Public Law, Glasgow University Staff at the British High Commission, New Zealand Professor Ron Paterson, formerly Health and Disability Rights Commissioner, New Zealand Accident Compensation Corporation, New Zealand: Dr Jan White ACC Chief Executive, Dr Kevin Morris Director Clinical Services Mike Playle Policy Manager, Strategic Policy & Research Fiona Colman Senior Policy Analyst, Strategic Policy & Research Joy Baird Business Manager, Board & Corporate Support Professor Emeritus Henry Johansson, Medical Expert of the Patient Claims Panel Carl Espersson, Secretary of the Patient Claims Panel, Sweden Kaj Essinger, Senior Advisor, Swedish Medical Injury Insurance 4 Summary of Conclusions and Recommendations 1. At the outset we sought to identify what we, as a group, considered a compensation system should seek to achieve. We agreed that this was not just about financial compensation; rather the objective should be to restore the person who had been harmed to the position they had been in prior to the injury, as far as this is possible. This is the expressed aim of the current system, and non-financial support can presently be made available to assist in achieving this aim. However, the present system relies to a large extent on the provision of financial support by way of an award of damages, which alone is unlikely to meet the needs of injured people. Rather, needs may extend to non-financial assistance such, for example, as rehabilitation, the provision of aids and appliances, as well as some investment in the restoration of trust and rebuilding of the relationship with healthcare professionals so that a patient feels confident in going back to the same practitioner or institution. 2. Our research team reported (Farrell et al, 2010) that previous research suggests that when an error has occurred, patients expect doctors to make a meaningful apology, provide an explanation and take steps to prevent the error from recurring. The findings of their research would appear to support the contention that for many, if not most, patients this is the primary aim, rather than a financial award. 3. The existing approach is that “the NHS does not pay compensation when it has no legal liability for the harm suffered by the patient”. In order to obtain compensation for harm arising out of medical treatment, whether provided by NHSScotland or others such as independent contractors, patients currently need to show that there was “damage wrongfully caused”. 4. We take a no fault system to mean one in which there is no need to establish that any individual was negligent; the focus is rather on the link between the (in)activity and the harm resulting from it. We explored several well-established no fault schemes in other jurisdictions with a particular focus on the New Zealand and Swedish models. Although these two schemes differ in extent, funding basis and process, each has as its goals the facilitation of access to justice, the provision of adequate compensation for injured patients and the appropriate adjudication of claims – goals which the review group believes should also inform the system of compensation in Scotland. In addition, these no fault schemes seem to encourage a focus on non-financial support, such as rehabilitation. 5. We tested the existing system, the existing system with some suggested improvements, the New Zealand and the Swedish system against the principles and criteria we developed and agreed were essential in a compensation system. The Swedish model came out at the top of the list, meeting more of the criteria than any of the others. 5 6. As a group we considered that the following were essential criteria for a compensation scheme: The scheme provides an appropriate level of compensation to the patient, their family or carers; The scheme is compatible with the European Convention on Human Rights; The scheme is easy to access and use, without unnecessary barriers, for example created by cost or the difficulty of getting advice or support; People are able to get the relevant specialist advice in using the scheme; Decisions about compensation are timely; People who have used the scheme feel that they have been treated equitably; The scheme is affordable; The scheme makes proportionate use of time and resources; The scheme has an appropriate balance between costs of administration (e.g. financial or time) and the level of compensation awarded; Decisions about compensation are made through a robust and independent process; The scheme has an independent appeal system. The scheme treats staff and patients fairly/equitably. A reasonable time limit is set for compensation claims 7. Given that the Swedish model satisfied more of the principles developed by the group than any other system, including the existing one, we offer the following recommendations for consideration: Recommendation 1. We recommend that consideration be given to the establishment of a no fault scheme for medical injury, along the lines of the Swedish model, bearing in mind that no fault schemes work best in tandem with adequate social welfare provision; Recommendation 2. We recommend that eligibility for compensation should not be based on the ‘avoidability’ test as used in Sweden, but rather on a clear description of which injuries are not eligible for compensation under the no fault scheme; 6 Recommendation 3. We recommend that the no fault scheme should cover all medical treatment injuries that occur in Scotland; (injuries can be caused, for example, by the treatment itself or by a failure to treat, as well as by faulty equipment, in which case there may be third party liability); Recommendation 4. We recommend that the scheme should extend to all registered healthcare professionals in Scotland, and not simply to those employed by NHSScotland; Recommendation 5. We recommend that any compensation awarded should be based on need rather than on a tariff based system; Recommendation 6. We recommend that claimants who fail under the no fault scheme should retain the right to litigate, based on an improved litigation system; Recommendation 7. We recommend that a claimant who fails in litigation should have a residual right to claim under the no fault scheme; Recommendation 8 We recommend that, should a claimant be successful under the no fault scheme, any financial award made should be deducted from any award subsequently made as a result of litigation; Recommendation 9. We recommend that appeal from the adjudication of the no fault scheme should be available to a court of law on a point of law or fact. Recommendation 10 We recommend that consideration should be given to our analysis of the problems in the current system, so that those who decide to litigate can benefit from them. 7 8. The potential benefits of a no fault approach would be that: More people would obtain compensation, because of the removal of the requirement to prove fault; Compensation could be awarded much more quickly, because: a) There is no need to prove fault; b) Care needs could be met by a guarantee of ongoing care provision by the state; c) The award could be made by administrative means or tribunal, rather than following an adversarial process; d) Money currently leaving the NHS would be retained in the system, thus improving NHS resources overall; e) There may be a considerable saving in legal fees. A no fault scheme also has the potential to integrate issues such as rehabilitation with financial compensation. 9. A number of issues came to light in the course of our discussions that the review group believes are relevant to the likely success of any system agreed upon. Criteria that we considered desirable were also agreed upon, as was the importance of some wider issues: Desirable The public in general trusts the scheme to deliver a fair outcome; The scheme does not prevent patients from seeking other forms of non-financial redress, including through the NHS Complaints system; The scheme encourages transparency in clinical decision-making; The scheme contributes to rehabilitation and recovery. Wider issues The scheme contributes to: organisational, local and national learning; patient safety; quality improvement. Lessons learned can be used to influence organisational risk management in the future; The scheme encourages and supports safe disclosure of adverse events; The scheme does not put barriers in place for referral to regulators of any cases which raise grounds for concern about professional misconduct or fitness to practise. 10. We offer some thoughts on these matters in chapter 6 in the hope that they may be of some interest and assistance. 11. We also considered whether or not the establishment of a limited no fault scheme specific to neurologically impaired infants should be created in the event that a general no-fault scheme is not introduced. This is presented in Appendix B. 8 Chapter 1 Introduction and background 1.1 In its consultation on the possible content of a Patients‟ Rights Bill (conducted between 22 September 2008 and 16 January 2009) the Scottish Government acknowledged that it was possible that there may be instances where financial compensation should be paid without the need to go through the legal process. The consultation paper expressed the Scottish Government‟s view that: a no fault compensation scheme could be simpler than existing processes, and could support the development of the concept of a mutual NHS as well as a positive feedback and learning culture; and that no fault compensation was the favoured way forward for the NHS in Scotland. 1.2 The consultation paper also: acknowledged the need for further work on the practical implications and potential costs of any such change in compensation arrangements; and made it clear that the Scottish Government would explore the potential benefits for patients in Scotland of a no fault compensation scheme before taking any firm decision on future arrangements. 1.3 To progress this work Nicola Sturgeon, Deputy First Minister and Cabinet Secretary for Health and Wellbeing, announced on 1 June 2009 that she was establishing the No fault Compensation Review Group, to be chaired by Professor Sheila McLean of Glasgow University. We held our first meeting on 14 August 2009 and our last meeting on 7 October 2010. Meeting papers and the Minutes of the Group meetings are available on the Scottish Government website at: http://www.scotland.gov.uk/Topics/Health/NHS- Scotland/No faultCompensation. A list of the Group members is included at Appendix A. Remit 1.4 We were asked by the Cabinet Secretary for Health and Wellbeing to consider the potential benefits for patients in Scotland of a no fault compensation scheme for injuries resulting from medical treatment, and whether such a scheme should be introduced alongside the existing clinical negligence arrangements, taking account of: The cost implications; The consequences for healthcare staff, and the quality and safety of care; The wider implications for the system of justice and personal injury liability; and 9 The evidence on how no fault compensation has operated in other countries. 1.5 We were tasked to give full, frank and objective consideration of no fault compensation for medical injury and to submit our report and recommendations on the key principles and design criteria that could be adopted for a no fault compensation scheme in October 2010. 1.6 A research team, led by Professor Frank Stephen, University of Manchester, was appointed in November 2009 to support our work by: Reviewing and providing an up-to-date analysis of existing no fault schemes in other countries; Identifying the financial and other implications of introducing such a scheme within NHSScotland; Gathering information and stakeholder views from organisations representing healthcare staff and NHS service users as well as from individual NHS service users who have used the current system. The complete research findings are included in Volume II of this report. However, evidence from the report has been incorporated (and is referenced) as appropriate within the relevant chapters of the report to support our conclusions. Approach adopted 1.7 We were specifically asked to consider whether or not there would be benefits in changing the current fault-based system to one based on no fault for medical injuries. Although this limited the scope of our considerations to the legal system itself, throughout the course of our deliberations it became clear that other issues were also important, such as what patients actually want (for example, a meaningful apology, an explanation for what happened), questions about patient safety, the need for a system that is capable of learning from mistakes and professional disciplinary issues. 1.8 Although we have confined our recommendations to the terms of the remit, we do make some general comments in chapter 6 concerning associated matters that appear to be integral to the likely impact and/or benefits of the recommendations we have made and how they might be implemented. We consider that this might also provide the impetus for further non-legal developments to improve the wider situation for patients and healthcare professionals, and for the NHS as a whole. We also agreed that any recommended changes should cover all healthcare professionals including those not directly employed by the National Health Service. Uniformity in the evaluation of liability, we believe, would benefit all parties. We accept, as a number of members of the group have pointed out, however, that there may be difficulties in including independent contractors (such as GPs and GDPs) and private practice in any no fault scheme for a number of reasons, including their existing indemnity arrangements and the need to consider historical liabilities. However, the group believes that fairness 10 dictates that all patients should have access to an improved system if possible. If this proves impossible, we nonetheless believe that there are benefits that could be obtained by a move to no fault for NHS patients. Our preference, however, remains that all patients should be covered by the no fault scheme. 1.9 We agreed that, for completeness, it was also important that we consider possible improvements to the current system as well as what benefits might arise from a move to no fault liability. 1.10 There are, of course, a number of interests at stake – for example, patients, NHS Boards, healthcare professionals, healthcare providers, equipment suppliers, regulatory bodies, Royal Colleges, medical defence associations and the legal profession. The Review Group has been fortunate to have representation from all of these interested parties in its membership. This encouraged us to adopt a strategy which proactively utilised the unique expertise of members to inform both our discussions and the development of our recommendations, by commissioning discrete and concise papers from specific members. We also consulted other experts as and when this was appropriate. We acknowledge their respective contributions within the report. 1.11 We considered a wide range of oral and written evidence in preparing this report. A full list of the evidence considered is at Appendix C. Some broad definitions for certain words or phrases referred to in this Report are given in Appendix D. 1.12 We initially identified four potential options (a – d) for consideration and as our work progressed we added another (e): a. the establishment of a no fault system to run alongside the existing system; b. the establishment of a stand-alone no fault system and abandonment of the existing system; c. retention of the existing system in its present form; d. the recommendation that the current system be modified and improved upon; and e. the establishment of a no fault system to run alongside an improved existing system. 1.13 We developed a set of principles upon which we believe a compensation system should be based. Discussion of these principles can be found in chapter 4. 11 Chapter 2 Evaluation of the current compensation system 2.1 The existing approach is that “the NHS does not pay compensation when it has no legal liability for the harm suffered by the patient”. In order to obtain compensation for harm arising out of medical treatment provided by NHSScotland, patients currently need to show that there was “damage wrongfully caused”. The test for establishing negligence requires the pursuer to establish three elements. There must be loss, injury or damage; a breach of a duty of care, and this breach must have caused the harm complained of (causation). A loss, injury or damage is compensable in law only if the injured person can show that another person was at fault. Fault, like loss, is a technical concept and is more than simply making a mistake. The mistake must be a culpable, or blameable, mistake before it will be characterised as amounting to fault for legal purposes. 2.2 Whether a claim is lodged against an NHS healthcare provider, or an independent contractor, it is not enough for a pursuer to show that he or she has suffered a legally recognised injury, that the defender had a duty of care towards the pursuer, and that the defender fell below the standard of reasonable care – that is, that the duty of care was breached. Negligence alone does not entitle a pursuer to damages in compensation for harm or loss. In addition to negligence (breach of a duty of care), the pursuer must show a direct causal connection between the breach of duty (the fault) and the injury suffered (the damage or harm). There is, therefore, no entitlement to compensation unless causation can be established. 2.3 The „legal test‟ for fault that is applied in cases of medical negligence is the 1955 „Hunter v Hanley‟ test which requires the pursuer to establish that: There is a usual and normal practice; The doctor has not adopted that practice; and The course adopted is one which no professional person of ordinary skill in that field would have taken if acting with ordinary care. 2.4 In simplistic terms, a mere “mistake” will not mean that a doctor is at fault. A doctor will only be deemed negligent if he or she has failed to meet the minimum acceptable practice. Failure to meet best or optimal practice is not enough to establish fault. What amounts to acceptable (i.e. non negligent) practice will depend heavily on the evidence of expert (medical) witnesses. 2.5 This is a stricter test than that applied in cases of non-professional negligence (which is based more firmly on “reasonableness”) and it is therefore more difficult for a patient to show that a health care professional has fallen below the appropriate standard of care than it would be for someone suing for personal injury in a non-professional context. This, together with the increased practical difficulties in establishing causation in health care situations, means that establishing liability is particularly problematic in medical negligence cases. 12 2.6 There are, in addition, further problems associated with the current system. For example, the amount of funding provided by the Legal Aid Scheme is considered by some not adequate to reflect the amount of work involved in investigating the circumstances of a case. Reimbursement rates for work done are considered to be poor, with the result that many practitioners are now refusing to undertake Legal Aid work in this field. This is a significant access to justice issue and a matter of concern raised by a number of members of the group. Equally, the general requirement that one expert should be instructed at a time when initial investigation is under way can cause significant delay. 2.7 For many patients, the ability to seek compensation depends on the availability of Legal Aid or Legal Advice and Assistance (LAA). Information was sought from the Scottish Legal Aid Board in relation to applications and this shows that 710 applications for LAA to investigate whether or not evidence exists to support a claim were made in 2008-09. There were 862 applications for an increase in authorised expenditure of which some would relate to LAA applications made in previous years and of these 770 were granted for the full amount and 33 for a lesser amount. During the same period 65 of the LAA applications resulted in a claim upon the fund. 2.8 In England, all civil legal aid providers must sign a Unified Contract (Civil) with the Legal Services Commission. This regulates how Civil Legal Aid work is funded by the Community Legal Services (CLS) to ensure the provision of experienced practitioners who will provide competent, quality assured best value. In Scotland there are no rules mandating that Legal Aid is only available to specialist practitioners (at least in the field of reparation). This increases the likelihood of cases being taken on by inexperienced practitioners. The effect is that claims which should not be run are run, and good claims are often under-settled or not properly investigated. This situation can also promote delay. Rules in England and Wales in relation to specialist practitioners have been shown to be beneficial 2.9 Concern about the availability of legal representation, and particularly, suitably qualified legal representation is reflected in the empirical research findings reported by the research team: “The pursuers‟ solicitors explained that one of the largest barriers facing people who potentially have been the victim of clinical negligence is finding a solicitor prepared to take on their case. They explained that the main reason for a client being turned away was limited sources of funding, and that there was also a lack of solicitors‟ prepared and able to take on clinical negligence work in Scotland. This problem was reflected in the pursuer interviews, and several pursuers described difficulties in finding a solicitor to take on their case.” The problems associated with non-specialist legal representation for patients were also addressed in the research. Overall the statistical analysis conducted by the researchers suggests that: 13 “….a settlement is more likely if the claimant is represented by a „specialist‟ medical negligence firm of solicitors. It is also the case that these specialist firms are likely to be associated with high value cases. However it should be noted that our statistical analysis cannot distinguish between cause and effect here. It may be that a claimant is more likely to choose a specialist firm if the claim is potentially of high value but it could also be that specialist firms are only willing to take on claims with high potential „value‟.” 2.10 Further problems identified with the current scheme (which are not necessarily specific to medical injury) include the following: Length of time – many claims can take months, if not years, between initial investigation and final resolution by way of Judgement or settlement. Adversarial culture which can lead to: o Delay in disclosure of expert opinions or information – parties frequently do not „show their hand‟ until the parties are well advanced into the adversarial process; o Delay in focussing the issues – crucial issues in dispute frequently do not become focussed until late into the dispute when the facts may be clarified; o Uncertainty of outcome – Again, parties sometimes have no idea as to the likely outcome until the adversarial process is well advanced; o Perception of lack of openness – a perception by many claimants that there has been a lack of openness by clinicians or those representing clinicians; Disproportionality of legal expenses – the legal expenses of investigating and pursuing the claim can be can be disproportionate to the value of the claim. 2.11 At our meeting in January 2010 we heard from Colin McKay, Deputy Director, Legal System Division, SG Justice Directorate, about Lord Gill‟s recent report on the Civil Courts Review (CCR). 2.12 Colin explained that the CCR principles included fairness of procedures and practices, secure justice, accessibility, encouragement of early resolution and effective and efficient use of resources. Lord Gill made a series of recommendations for improvements in civil court processes including recommendations for structural reform and proposals for specialised judges and a third tier of court with a new kind of judge. The report also proposed a new personal injury court and the development of a protocol for clinical negligence based on the use of „Chapter 43‟ fast track type procedure for personal injury cases in the Sheriff Courts. 2.13 At the time of writing this report, Lord Gill‟s report was still under consideration by the Scottish Government. The CCR would not affect the law of negligence but aimed to make litigation more accessible, affordable, 14 efficient and fair. It is unlikely, however, that all the issues identified in this report would be satisfactorily resolved even if the Gill report were implemented in full. 2.14 Payment of compensation under the current scheme can result from an out-of-court settlement or successful litigation. The National Health Service will fund awards on claims made against directly employed staff of NHS Health Boards only. Clinical negligence claims against Independent Family Health Service providers, e.g. most GPs, dentists, opticians, pharmacists and private healthcare practitioners, are handled by defence organisations. A number of these organisations were represented on the group. 2.15 NHS Boards currently indemnify directly employed staff, funding all settlements of clinical negligence claims against them and also receive additional protection from more substantial losses by participation in the Clinical Negligence and Other Risks Indemnity Scheme (CNORIS), a risk- sharing scheme launched on 1 April 2000, with membership mandatory for all NHSScotland healthcare bodies. The Scheme‟s aim is to provide financial efficiency through cost-effective risk pooling and claims management. The Central Legal Office (CLO) defends claims on behalf of the NHS Boards. Costs and data associated with the scheme are shown below. 2.16 The data obtained from the Central Legal Office reveal that claims rose during the 1990s, but that there has been a declining trend since 1999. This is illustrated in Figure 1. Figure 1: Number of claims received since 1992 Number of Claims Received 700 600 500 400 300 200 100 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Year Claim Received Claims Received Trendline 2.17 One matter of concern for patients (and no doubt for healthcare professionals) is the length of time taken to resolve individual cases. This is 15 influenced by a variety of issues including the need to consider the evidence of experts who may have differing views, as well as the difficulties of gaining access to legal aid and the funding of claims that we have already referred to. 2.18 Under the current system the level of compensation is decided by the court based on individual circumstances, allowing compensation to be tailored to need. Claim Costs 2.19 Data supplied by CLO allowed the research team to examine the amount paid out as awards on settled claims and also to examine the costs in terms of CLO chargeable costs and the outlays in achieving those settlements. 2.20 Figure 2 shows the awards and costs of claims closed for each year from 1998 to 2009. It should be noted that the sums of money plotted in this figure do not necessarily correspond to actual CLO expenditure in these years. The year refers to the year the claim was closed by CLO. Figure 2: Total Awards and Costs of Closed Claims Expenditure by Year Claim Closed: 1989 - 2009 £35,000,000 £30,000,000 £25,000,000 £20,000,000 £15,000,000 £10,000,000 £5,000,000 £0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Year Case Closed Total Awards CLO Expenses & Outlays Adverse Outlays 2.21 It is clear from the figure that total awards and costs have risen more or less steadily over this period in absolute terms. The sums quoted, however, are in current prices and have not been adjusted for inflation. Figure 3 shows the total of awards and the number of settled claims. Although the value of awards has risen by more than five fold over the period, the number of settled claims in 2009 was only slightly above those at the beginning of the period. This suggests that the average sum awarded has risen significantly over the period, even after inflation has been taken into account. 16 Figure 3: Total Awards and Number of Settled Claims Settled Claims 1998 - 2009 Number and Total Awards £30,000,000 300 £25,000,000 250 Number of Settled Claims £20,000,000 200 Total Awards £15,000,000 150 £10,000,000 100 £5,000,000 50 £0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Year Claim Closed Total Awards Claims Settled 2.22 Earlier in this report we saw that the trajectories of claims below £20,000 are somewhat different from those above that sum. Figure 4 shows the average award and average costs associated with settled claims where the total award was less than £20,000. Figure 4: Average Award, Costs and Expenditure for Settled Claims with Award below £20,000 Average Award, Costs and Expenses for Settled Claims < £20,000: 1998 - 2009 £20,000.00 £18,000.00 £16,000.00 £14,000.00 £12,000.00 £10,000.00 £8,000.00 £6,000.00 £4,000.00 £2,000.00 £0.00 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Year Claim Closed Av Sm Total Award Av CLO Cost Sm Aw Av Sm Adv Outlays 2.23 The average award in these settled claims has fluctuated over the period and at the end of the period was slightly higher than at the beginning. 17 However, the cost to NHS Health Boards in adverse fees, CLO chargeable costs, and outlays has risen quite significantly as have the sums paid out in adverse costs. Indeed the latter two items taken together are on average higher than the award. This is illustrated in Figure 5. In recent years costs have been much greater than the awards made for these low value awards. Figure 5: Average Costs as a Percentage of Average Award for Awards below £20,000 All Costs as Percentage of Average Award: Claims with Award < £20,000, Closed 1998-2009 250% 200% 150% 100% 50% 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Ratio of Costs to Award Figure 6: CLO Costs of Unsettled Claims Costs of Unsettled Claims Closed Cases 1998 - 2009 £1,400,000 £1,200,000 £1,000,000 £800,000 £600,000 £400,000 £200,000 £0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Year Claim Closed Costs of Unsettled Claims 18 2.24 In addition to the costs of settled claims, CLO incurs costs and outlays in claims that are not settled. On some occasions, NHS Health Boards will make a payment to the claimant for fees incurred by the claimant even where the claim is not settled. The total of the costs for unsettled or repudiated claims is shown in Figure 6. These costs have risen over the years from around £300,000 to over £1M. This analysis is unable to estimate the costs to pursuers of unsettled claims where NHS Health Boards do not make a contribution. 2.25 This brief survey of costs indicates clearly that significant costs are incurred for unsettled claims and that the costs associated with small claims have been rising and currently can be greater than the awards made. 2.26 In order to inform our deliberations, we considered proposals for reform of the tort system in both England and Wales. Evaluation of proposals in England 2.27 In England, reform of the existing clinical negligence litigation system and its replacement with a no fault scheme was initially considered as long ago as the 1970s, although it was not recommended that such a scheme be established at the time (Pearson 1978). Throughout the 1980s and into the mid 1990s, however, it continued to be the subject of debate and analysis in the relevant academic and policy literature in the UK (Ham et al. 1988; Jones 1990; Brazier 1993; Fenn 1993; McLean 1993; Oliphant 1996). 2.28 The impetus for the most recent episode of clinical negligence reform in England had its origins in the publication of two reports that were highly critical of the current clinical negligence litigation system. (NAO 2001, Fenn et al. 2000; 2004). Against a background of a dramatic increase in the number of claims being made, the resolution of claims was seen as taking too long and, in many cases, legal costs were considered excessive. One report, (Learning from Bristol 2001: 442) recommended that the current system be abolished and replaced by an „alternative administrative system‟ which did not foster a „culture of blame‟. 2.29 In 2003, the Chief Medical Officer (CMO) for England published his recommendations on clinical negligence reform in the report: Making Amends (CMO 2003). The CMO considered the option of establishing a comprehensive no fault compensation scheme in England. This option was ultimately rejected, primarily on cost grounds. For example, data produced by Professor Michael Jones in his discussion paper on No-Fault Compensation, which was considered in 2003 by the Expert Group on Financial and Other Support chaired by Lord Ross, estimated the cost of introducing a no fault compensation scheme for England and Wales as being between £973.5 million and £1.25 billion. Concern was also expressed as to the need to comply with Article 6 of the European Convention on Human Rights (CMO 2003: 110-13). 19 2.30 Recommendations were, however, made for the establishment of an NHS redress scheme which would include care and compensation in the case of birth-related neurological injury (inspired and adapted from the schemes operating in Virginia and Florida) and a redress package (including financial compensation) for low value claims (CMO 2003: 119-21). 2.31 The Government subsequently agreed the introduction of a redress scheme for low value claims (£20,000 or less) the parameters of which were set out in the NHS Redress Act 2006. Despite calls for the adoption of alternative tests for eligibility, the Government preferred to retain established tort law principles as the basis for determining eligibility. It did not adopt the CMO‟s recommendation regarding the establishment of a no fault scheme for birth-related neurological injury. 2.32 The proposed NHS redress scheme has been subject to criticism on a number of grounds. It has been argued that, if implemented, it is unlikely to bring about greater access to justice for injured patients; it lacks sufficient independence from the NHS in terms of investigating what went wrong; and it fails to provide for accountability on the part of healthcare professionals. In the circumstances, it is unlikely to address issues of longstanding concern to injured patients such as poor communication, inadequate explanation and patient‟s feeling ignored (Vincent et al.1994), and would therefore be unlikely to inspire patient confidence in the scheme (Farrell and Devaney 2007: 647- 48). On the other hand, while the proposed scheme has been criticised for its lack of independence and for retaining the same qualifying criteria as is used in the Courts (a liability in tort), it is generally accepted as having the potential to provide speedier access to justice for many more injured patients, reducing unnecessary legal costs, and supporting organisational learning for patient safety. While there are no definite plans at present to implement an NHS Redress Scheme in England, a Welsh version of the scheme is to be launched this year (see paragraphs 2.37 to 2.41 below). 2.33 In the wake of Lord Woolf‟s report (1996), as well as centralisation of the defence of claims under the NHS Litigation Authority (NHSLA), the current clinical negligence litigation system in England has undergone significant reform in the last ten years. The time taken to process claims is much reduced, with those claims under the largest scheme (CNST) taking on average 1.56 years to resolve. Only 4% of claims go to court, including settlements requiring court approval. The number of claims made on an annual basis has been largely static, although there was a small increase in the past year (2009). 41% of claims do not proceed beyond the notification/ investigation stages. Overall legal costs are considered high, with Claimant‟s legal costs a particular source of concern (NHSLA 2009: 10-14). 2.34 Payments made by NHSLA in respect of negligence claims against the NHS in England in the financial years 2004-05 amounted to £528m, rising to £827m in 2009-10. 20 2.35 In September 2009 the House of Commons Select Committee published their report on Patient Safety. This is available at http://www.publications.parliament.uk/pa/cm200809/cmselect/cmhealth/151/1 5102.htm Section 4 on „Harmed patients and their families or carers‟ (from paras 57 – 98) is of particular relevance. This recommends: “If anything, the Government should be considering more radical measures in this direction, rather than shying away from the limited changes for which it has already legislated. We urge consideration of a scheme like that in New Zealand, where litigation over clinical negligence has been entirely replaced by a statutory right to compensation for “treatment injury” from an independent fund, without the need to prove negligence as required under tort law. (Paragraph 98)” 2.36 The UK Government's response, which was published in October 2009, is available at http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPo licyAndGuidance/DH_106898 and states: “No fault” compensation was considered as part of the Making Amends (2003) consultation and more recently during the passage of the NHS Redress Act 2006. The Department rejected the introduction of a “no fault” scheme for a number of reasons, including: overall costs are expected to be higher than the current tort system because more claims would fall within the scheme; there is no clear definition of “no fault”, and we would argue that none of the schemes we examined are genuinely “no fault”; a high minimum level of injury or hospitalisation that a patient has to meet to qualify may be necessary to make a scheme cost-effective; there is still a need to establish causation, leading to arguments about “fault” being replaced by ones about “cause”; explanations and apologies are not necessarily provided in a system which focuses on financial recompense alone; a “no fault” scheme, in itself, does not improve accountability or ensure learning from adverse events. Ministers in Scotland have already announced that they are going to consider the benefits to patients of introducing a “no fault” compensation scheme in Scotland. We maintain an interest in the review and, rather than duplicating, we will await its outcome in order to inform further thinking. Evaluation of proposals in Wales 2.37 The Review Group also considered the Welsh Assembly consultation document on the “Putting Things Right” initiative, which sought views on the draft regulations for a Welsh Redress Scheme under which the qualifying criterion is a “qualifying liability” (an assessment by the NHS body that there would be a qualifying liability in tort for personal injury). The Welsh measure is an administrative alternative to litigation which does not require the claimant to prove fault or liability, and so could be considered to fall within a wide definition of no fault compensation. 21 2.38 The key characteristics of the Welsh Redress scheme, which essentially adopted the same approach as the English NHS Redress Act 2006, are that: It is restricted to NHS services (including those provided by independent providers on behalf of the NHS); The scheme would not initially extend to Primary Care Services; There should be a limit on the size of „claims‟ dealt with to those assessed as likely to be less than £20,000 (this was subsequently increased to £40,000) or less for pain, suffering and loss. Actual financial losses (special damages) will be calculated on top of this. Consideration should be given to the combination of different investigation roles, risk management, complaints and claims into a “joined-up” process strongly linked to learning lessons and improving safety; A redress „package‟ should be available that can include remedial treatment as well as financial compensation: apology, explanation and a report on patient safety actions resulting from the incident; Specialist advice and support and legal representation should be available to empower patients/families in the process; and Claimants would only give up their right to litigate if they accept a settlement offer. 2.39 The Welsh Assembly indicated in its consultation report, which was issued on 2 August 2010, that a number of amendments had been made to reflect comments received during the consultation. Changes provide clarity in relation to, amongst other matters: time limits for raising a concern; timescales for investigation; the operation of the arrangements in primary care; how the arrangements will work if a primary care concern is raised with a Local Health Board (LHB); suspension of the limitation period. In other words, if the organisation believes it may have been legally at fault and proceeds to investigate this further, then the date of the decision must be noted formally. This will then suspend the “Limitation Period” while the investigation carries on (this is the time available to a person to take legal action in the courts, usually 3 years; longer in the case of children). 2.40 Before finally laying the Regulations, the Welsh Assembly issued the draft Regulations for a further short, technical consultation from 6 to 30 September 2010. This was specifically intended to cover: how the redress arrangements would operate in cross-border situations and with independent providers in Wales; and a proposed overall global financial limit for damages. 22 2.41 While most members of the working group supported the main principles behind the scheme, in as much as they were designed to introduce a better way of handling concerns, they had reservations about the implications of a different approach in relation to cases under £40,000 and the proposal that it be run by the NHS rather than by an independent body. Evaluation of existing no fault systems in the UK 2.42 There have been no fault schemes in operation in the United Kingdom since the passing of the Workmen's Compensation Act 1897. We consider the provisions of some of these schemes below. (i) The Criminal Injuries Compensation Authority administers the Criminal Injuries Compensation Scheme 2008 which operates throughout England, Scotland and Wales. Northern Ireland has its own Scheme, as do many other countries. The CICA pays compensation to people who have been innocent victims of a violent crime or those injured trying to apprehend criminals or prevent a crime. Since 1 April 1996, the level of compensation has been determined according to a scale, or tariff, set by Parliament. Under the current (2008) scheme the minimum tariff payment is £1,000 and the maximum tariff payment for a single injury is £250,000. In certain circumstances, additional payments may be made for loss of earnings and special expenses. The Authority decides the amount of money claimants are entitled to by looking at all the available information on their financial circumstances before and since the event in question. The maximum overall award is £500,000. The scheme reflects the basic elements of common law claims for personal injury and wrongful death, but the size of awards paid in recognition of victims‟ injuries is fixed according to a tariff and does not always reflect the needs of the individual. (ii) The Vaccine Damage Payments Act 1979, which came into force on 22 March 1979, introduced a scheme of payments for those severely disabled as a result of vaccination. The list of „qualifying‟ vaccines has been added to from time to time, most recently by the Vaccine Damage Payments (Specified Diseases) Order 2009 (SI2516/2009) which adds vaccines against the H1N1 influenza virus. When the Secretary of State is satisfied that a person has been severely disabled and that, on the balance of probabilities, this is as a result of vaccination against any of the diseases specified in the Act and associated regulations, a tax-free one-off lump sum is payable (currently £120,000). This payment will affect certain means-related benefits such as job-seekers allowance, housing benefit and council tax benefit. The policy justification for the scheme was that the community as a whole owes a special duty towards “vaccine-damaged children”, because the community as a whole benefits from wide- 23 spread vaccination and the Government has a clear interest in encouraging parents to have their children vaccinated. Severe disability is assessed as being disability of 60% or more. The payment is designed to ease the present and future burdens of those suffering from vaccine damage and their families. A payment under the scheme does not prejudice the right of the disabled person to pursue a claim for damages through the courts, although the amount of any award made by the scheme will be deducted from any compensation achieved following litigation. There are clear, and tight, limitations on eligibility, both factual and judgmental and very few claims are successful. Between April 2000 and June 2006, 1164 claims were received but only 21 were successful. Most claims are rejected either because the claimant cannot prove causation, i.e. that the severe disability was suffered “as a result of the vaccination”, or because the claimant cannot show that their disability meets the level of being “severe”. (iii) The Armed Forces Compensation Scheme provides compensation for those who are injured or made ill as a result of service in the armed forces. It provides a lump sum, on a 15-point sliding scale depending on the seriousness of the injury and, for the most serious injuries, a Guaranteed Income Payment for those who suffer a loss of earning capacity. It is a no fault scheme that does not remove the right to sue the MoD for negligence, although again any compensation awarded under the scheme will be taken into account in any negligence award. (iv) The Diffuse Mesothelioma Scheme, established on 1 October 2008, provides a lump-sum payment, of varying levels depending upon the claimant‟s age (from £8,197 to £52,772), to individuals who suffer from the asbestos-related disease, Diffuse Mesothelioma, who are unable to claim compensation in any other way (for example no worker‟s compensation is available because the disease was not contracted at work, or no negligence claim is possible because there was no negligence). Conclusion 2.43 The concept of no fault is not, therefore, entirely foreign in UK law, and the examples above are but a few of the schemes that currently operate on a no fault basis. However, its availability is currently reserved for relatively narrow purposes. The majority of personal injury claims relating to treatment injury will still require to be raised using the current medical negligence framework. As we have seen, there are a number of difficulties arising from this – the legal difficulties in meeting the Hunter v Hanley test, the availability of adequate legal aid, access to specialised legal representatives, overall costs (particularly legal costs) and delay in reaching a conclusion. These problems contributed to the development of no fault schemes in other jurisdictions, some of which are considered in the following chapter. 24 Chapter 3 Evaluation of no fault compensation schemes in operation in other jurisdictions 3.1 Before evaluating specific systems, it is important to explain what no fault liability actually amounts to. As we have seen in chapter 2, at present in Scotland, compensation for medical injuries depends on proving both negligence and causation. On the other hand, a no-fault approach would mean that it was necessary only to prove that the injuries were caused by medical treatment, but not to establish blame or individual responsibility. 3.2 The research team‟s literature review and interim report (Farrell et al, 2010) reviews and analyses existing no fault schemes in New Zealand (NZ), Nordic countries (Sweden, Finland, Denmark, Norway), and the schemes operating in Virginia and Florida (United States) for birth-related neurological injury. The review drew mainly on published and grey literature, as well as academic discussions and debate over the past ten years. (See Volume II of this report) 3.3 Following review, the research report identifies the common elements of no fault schemes; namely: All have eligibility and threshold disability criteria which need to be satisfied before cover is accepted; There are limitations on the extent to which cover is provided: for example, there may be caps on certain categories of compensation and compensation for non-pecuniary losses (such as pain and suffering) may not be available; Levels of financial compensation/entitlements tend to be lower than awards under the delict/tort based systems; There is simpler and broader „access to justice‟ in no-fault schemes, particularly in relation to the cost of initiating or submitting claims, as well as time to resolution; Access to the courts may be restricted; There is a comprehensive national social welfare/social insurance system in place. 3.4 The research team‟s literature review also identified specific advantages and disadvantages that are said to arise from no fault schemes, which are reproduced below: Advantages A principled social/community response to personal injury which includes a recognition of community responsibility; comprehensive entitlement; full rehabilitation; fair and adequate compensation; and administrative efficiency; Expanded eligibility criteria for cover that facilitate greater access to justice for patients who suffer medical injury than would be the case 25 in relation to clinical negligence claims brought under delict/tort- based systems; Greater scope to collect data on, as well as learn from, medical error with a view to enhancing patient safety; Greater access to justice for patients who have suffered medical injury, which includes providing a clearer „road map‟ towards obtaining suitable redress; Promotion of better, as well as less defensive, relationships between patients and health practitioners when medical injury has occurred; Greater efficiency in terms of both time and costs than would be the case in relation to the management of clinical negligence claims brought under delict/ tort-based systems; Rehabilitation can proceed in a more timely fashion, without having to wait until legal action in the courts is resolved; Easing of pressure on health practitioners with regard to escalating insurance premiums, the availability of liability and the threat of litigation; These schemes work well when combined with well-established and well-funded national social security systems and independent patient complaints processes; Reduction or elimination of the need to take legal action in the courts for medical injury, thus lessening the cost and administrative burden on the courts and interested parties, as well as reducing distress and tension between injured patients (pursuers) and health practitioners/health institutions (defenders). Disadvantages Potential lack of affordability, particularly in the context of large national populations; Financial compensation/entitlements in the existing schemes are set lower than would be the case in successful clinical negligence claims brought under delict/tort-based systems; Loss of focus on the need to promote institutional and professional accountability in relation to (preventable/avoidable) medical injury; The removal of the threat of litigation which is sometimes said to provide an incentive for health practitioners and health institutions to avoid unsafe practices in relation to medical treatment provided to patients; A significant increase in the potential number of claims arising out of medical injury, which in turn could promote the development of a compensation culture; The schemes only work well in terms of providing adequate financial compensation/entitlements for medical injury in the context of a well-funded national social security system; There is a lack of empirical evidence that institutional and professional learning from medical error is enhanced by no-fault schemes; 26 There is still a requirement to prove causation in no-fault schemes (thresholds may vary). This is often the most difficult aspect to establish in clinical negligence claims brought under delict/tort- based systems. Difficulties in establishing causation may therefore act to prevent greater access to justice under no-fault schemes; Although eligibility criteria may be seem more expansive under no- fault schemes, allowing for a greater number of injured patients to obtain cover, existing schemes have a significant rate of rejection as a result of failure to satisfy eligibility criteria; No-fault schemes which provide for payments based on set amounts or fixed tariffs are not sufficiently responsive to the individual needs of injured patients; No-fault schemes do not automatically guarantee that key elements of redress desired by injured patients, such as explanations, apologies and accountability of health professionals, are provided; Restriction of access to the courts in no-fault schemes may potentially infringe human rights law (depending on the jurisdiction), and may also encourage injured patients to seek redress/accountability in other ways (e.g., through the criminal law). 3.5 It should be noted that these advantages and disadvantages reflect the literature in this area and are not necessarily definitive of how the systems actually work in practice. Analysis of Specific No Fault Schemes 3.6 We were particularly interested in, and sought to collect and consider further evidence on, the no fault schemes operating in New Zealand (population of 4.3 million people) and Sweden (population of 9.2 million people). These schemes are very different. The New Zealand Scheme provides compensation for personal injury resulting from any type of accident – road, domestic, work, medical, etc. A person who has an entitlement under the scheme is barred from raising a tort action. The system in Sweden is confined to medical injury and includes recourse to the courts. The New Zealand Scheme 3.7 The New Zealand Scheme, which is the world‟s most comprehensive, was initiated as the direct result of the report of a Royal Commission (Woodhouse Report 1967) which recommended the establishment of a no- fault compensation scheme for personal injury based on the following principles: community responsibility, comprehensive entitlement, complete rehabilitation, real compensation, and administrative efficiency (Royal Commission 1967, para. 4; McKenzie 2003). The Accident Compensation Act 1972 (NZ) was subsequently passed, and the scheme came into effect in 1974. The scheme, which has subsequently been amended on a number of occasions, was based on a clear policy-based agenda which broadly argued that since society generates the risks to which people are exposed in their daily lives, it was right that society should provide compensation when harm 27 occurs. This scheme provides statutory entitlements for all persons who suffer „personal injury by accident '. 3.8 In terms of medical injury, reform to the eligibility criteria in 2005 resulted in the replacement of the earlier requirement to establish „medical misadventure‟ with the term „treatment injury‟. This reform removed the fault- based element which had effectively been retained within the medical misadventure criterion. The 2005 reforms also promoted an enhanced focus on systems learning from medical error and the creation of a reporting scheme that was to be driven by concerns over patient safety rather than assigning blame to individual health practitioners (McLay et al. 2004; Oliphant 2007). 3.9 As a result of the reforms which came into effect on 1 July 2005, a person has cover under the scheme for personal injury as follows: Treatment injury suffered by the person Treatment injury in the circumstances described in section 32(7) Injury suffered as a consequence of treatment given to the person for another personal injury for which the person has cover Injury caused by a gradual process, disease or infection that is treatment injury suffered by the person A cardio-vascular or cerebro-vascular episode that is treatment injury suffered by the person (see s. 20(2) IPRCA 2001). 3.10 Treatment injury is defined under s. 32 IPRCA 2001 as a personal injury that is suffered by a person: seeking treatment from one or more registered health professionals; or receiving treatment from, or at the direction of, one or more registered health professionals; is caused by treatment; and is not a necessary part, or ordinary consequence, of the treatment, taking into account all the circumstances of the treatment, including the person's underlying health condition at the time of the treatment; and the clinical knowledge at the time of the treatment. 3.11 All adverse medical events, preventable and unpreventable, are potentially included. There is no requirement that the injury has to be suffered as the treatment is given or during the treatment process. (Manning 2006: 698-9). Cover can also extend to personal injury suffered by a person as a result of treatment given as part of a clinical trial in certain circumstances, including where the claimant did not agree in writing to participate in the trial. If a person suffers an infection that is a treatment injury, then cover extends to third parties who catch the infection from the patient or from the patient‟s spouse/partner. 3.12 “Treatment” includes the giving of treatment; diagnosis of a medical condition; a decision to treat or not to treat; a failure to treat or treat in a timely manner; obtaining or failing to obtain informed consent to treatment; the provision of prophylaxis; application of any support systems including policies, processes, practices and administrative systems which are used by the treatment provider and directly support the treatment. It also includes failure of 28 equipment, devices or tools which are used as part of the treatment process, whether at the time of treatment or subsequently. Failure of implants and prostheses are included, except where the injury is caused by general wear and tear. 3.13 The Accident Compensation Corporation (ACC) is responsible for administering the scheme. Once a claim has been lodged, the ACC will investigate it, determine whether or not the claimant is covered and, if so, what entitlements the claimant should receive. The ACC has two months to investigate the claim and inform the claimant of its decision. Treatment injury applications are managed by the Treatment Injury Centre (TIC). If cover is accepted then the case is referred on for assessment of entitlements (if appropriate). If the claim is high-cost or high-risk, such as one involving birth- related neurological injury, then if cover is accepted, it is referred to the ACC‟s National Serious Injury Centre which has expertise in dealing with such claims. The TIC has a set of internal controls as to when cover decisions are made on such claims. For straightforward claims, it is 14 days; moderate claims - 70 days; complex claims - 145 days. As a result of the treatment injury provisions, the TIC now receives a significant number of straightforward and moderate claims. If a decision cannot be made within the specified legislative time limits (e.g., up to 9 months) due to insufficient information, cover is declined, although investigations may continue. A fresh decision can be made once all relevant information is received. Between 1 July 2005 and 30 September 2009, 16,709 claims were accepted as treatment injury. 3.14 Funding for the scheme comes from a variety of sources including the following: Work account: premiums are paid by all employers; this is to cover work related personal injuries. Earners‟ account: non-work injuries suffered by individuals in paid employment, excluding motor vehicle accidents. Self-employed work account: work-related injuries to self-employed people and private domestic workers. Non-earners‟ account: injuries to people who are not in paid employment including students, beneficiaries, retired people and children. Motor vehicle account: injuries involving motor vehicle accidents on public roads. Treatment injury account: covers injuries resulting from medical treatment. 3.15 The treatment injury account: covers injuries resulting from medical treatment. The funds in this account are drawn from the Earners‟ Account and Non-Earners‟ Account. The Earners‟ Account funds are used to meet the treatment injury costs of claimants who were in paid employment prior to injury, whereas the Non-Earners‟ Account funds are used to meet the treatment injury costs of claimants who were not in paid employment prior to injury. The Non-Earners‟ Account is used to meet the majority of costs. The Treatment Injury Account is the smallest of the ACC‟s six accounts in terms of 29 levy revenue and claims liability, accounting for 3.5% of ACC‟s total net levy income and 7.5% of the scheme‟s total claims liability. However, there has been a significant increase in the number of treatment injury claims in recent years. In the last financial year, this resulted in the appropriation initially allocated to the account exceeding budget by NZ$146.1million (161%) (ACC Annual Report 2009: 47). 3.16 In order to bring about improvements to the scheme, particularly with regard to its financial situation, the New Zealand government tabled the Injury Prevention, Rehabilitation, and Compensation Amendment Bill 90-1 (2009), now the Accident Compensation Amendment Act 2010, which was passed into law on 3 March 2010. Its primary purpose is to improve flexibility in the scheme, facilitate cost containment, provide for closer working relationships between government agencies and the ACC, and improve financial reporting and accountability. 3.17 We held a video conference with the ACC in January 2010 to allow us to speak directly to staff and to raise additional questions in relation to the scheme. This was kindly facilitated by the British High Commission in New Zealand. The ACC provided the following information in relation to the numbers and costs of treatment injury claims: Numbers and costs Since the introduction of 2005 Act, to 30 June 2009, the ACC had received 27,174 claims for treatment related injuries; The number of claims has increased from approximately 280 lodged on average per month in July 2005 (under the earlier medical misadventure criterion), to approximately 750 on average per month in July 2009 (under the current treatment injury criterion); The outstanding claims liability in the Treatment Injury Account increased from $644 million as at June 2005 to $2.167 billion as at 30 June 2009; Treatment injury costs rose from $43 million in 2005/06 to $98 million (£46million) in 2008/09. These increases in costs and liability have been linked to an increase in the overall volume of claims, and the rising (and ongoing) costs of social rehabilitation over the lifetime of claims. This includes the costs of historical medical misadventure claims as well as the more recent treatment injury claims. 30 Figure 7: New Zealand - Cash costs of treatment injury 2009 Payment type NZ$ (000s) £ (000)s Lump sum/independence allowance 10,262 5,004 Social rehabilitation (personal support, equipment, 39,038 19,034 home/vehicle modifications) Vocational rehabilitation (assessments, equipment) 904 441 Treatment (medical, hospital, surgical, consultations, 19,766 9,636 dental, counselling, etc) Weekly compensation non-fatal 24,054 11,726 Weekly compensation fatal 2,932 1,429 Other expenses 1,120 546 Total costs 2009 98,076 47,816 3.18 If a claim is denied, the ACC is required to provide reasons. If a claimant disagrees with the ACC decision they can ask for a review. In the first instance, it is recommended that the claimant approach the ACC employee dealing with the claim, at which point an internal review can be conducted. There is also the option of a formal independent review following the initial decision on a claim by the ACC. The time limit for lodging an appeal is 3 months from the date upon which the claimant receives the ACC decision. Aspects of the decision which can be challenged during this independent review include the following: whether any entitlements should be provided, and which ones; the level of entitlements; any preliminary decisions that are necessary for the above decisions to be made; whether an unreasonably long time has been taken to deal with the claim; whether there has been a breach under the Code of ACC Claimants‟ Rights; or the claimant is unhappy with the ACC‟s response to their complaint. 3.19 The ACC uses its independent subsidiary company, Dispute Resolution Services Ltd, to carry out these reviews. The formal independent review is conducted by an independent reviewer who was not previously involved in the claim. A hearing is conducted for which the ACC provides copies of all details held on the claimant‟s file. The independent reviewer is required to make a decision within 28 days and that decision is binding, although there is a right of appeal to the District Court (unless the claim involved a review of an alleged breach of the Code of ACC Claimants‟ Rights), as well as a further limited right of appeal, primarily on points of law. 3.20 The ACC pays for the cost of the independent review and the claimant is responsible for meeting his or her own costs (e.g. retention of a lawyer and travel and other costs). If the independent reviewer finds that the ACC‟s decision was wrong in whole or in part, then an order that the ACC contribute towards the claimant‟s costs (within set limits) will be issued. Even if the 31 reviewer decides that the ACC‟s decision was correct, the reviewer can order the ACC to contribute towards a claimant‟s costs if they consider that the claimant acted reasonably in applying for the independent review. Overview of Nordic Schemes 3.21 The research report shows that Sweden (population of just over 9 million people) took the lead by adopting a voluntary administrative no fault scheme in 1975. Finland, Denmark and Norway followed in 1987, 1988 and 1992 respectively. Unlike the New Zealand Scheme, these Schemes are confined to medical injury, and all have similar legal and social goals which include: Establishing a patient‟s right to compensation when they suffer harm as a result of medical treatment; Easy and broad access to compensation by injured patients; Fostering of good relations between health practitioners and patients (with health practitioners facilitating 60 – 80% of all claims under the schemes); The promotion of safety and quality in care by learning from medical error and a move away from attributing blame. 3.22 The researchers reported that the available literature evaluating these Schemes tended to be descriptive rather than analytical, but what was available suggested that the schemes appeared to have a fair degree of support and were efficient in terms of cost and time, with similar advantages and disadvantages. Separate schemes have been established for drug injuries and recourse to the Courts exists alongside the no fault schemes. The Swedish System 3.23 The Swedish Scheme is specifically for medical accidents and the patient remains entitled to bring a delict/tort claim. In 1975 Swedish hospitals started their own insurance company for medical injuries to avoid local court proceedings that were difficult for a hospital to handle and to make it easier for patients to obtain compensation. In Sweden the eligibility criteria are structured around the notion of „avoidability‟; patients are eligible to receive compensation if they have suffered injury that could have been avoided. This scheme also uses the „experienced specialist rule‟, under which consideration is given to the risks and benefits of treatment options other than the one adopted and a retrospective approach has been taken in some cases in the evaluation of whether the injury was avoidable. This scheme was placed on a statutory footing following the passing of the Patients Injury Act 1996 and, while many of the provisions draw on the earlier voluntary scheme, the new legislation also places an obligation on both public and private healthcare providers to hold „patient insurance‟ to provide for compensation. Healthcare is funded by regional income tax and each of the 21 regions mutually owns and operates a medical injury insurance company. 32 3.24 Treatment and diagnostic injuries account for approximately 85% of all claims (Hellbacher et al. 2007; Kachalia et al. 2008). A claim must be filed within three years from the time that the patient became aware of the injury and/or within 10 years from the time the injury occurred. The following categories of injury are eligible for compensation - treatment injury, diagnostic injury, material-related injury (this will cover injury resulting from a defect in, or improper use of, medical products or hospital equipment), infection injury, accident-related injury. It is estimated that just under 50% of claims are rejected annually under the scheme, on the grounds that they do not satisfy the eligibility criteria. Compensation payments consist of two general components – pecuniary and non-pecuniary. Pecuniary damages cover loss of income and medical expenses incurred as a result of the injury, but not covered by other insurance. Non-pecuniary damages compensate for pain and suffering, disability and disfigurement, and inconvenience. 3.25 Under the Patient Torts Act 1996, a claimant is entitled to bring tort- based claims arising out of medical injury in the courts. Health care providers are required to carry liability insurance to cover such claims. The claimant must show with reasonable certainty that the health care provider‟s conduct caused the alleged injury. Where a claimant has sustained an injury due to the alleged negligent failure to provide information or obtain consent in relation to the provision of medical treatment, then a claim must be brought under tort law principles in the courts (Espersson 2000a; 2006; 2009). Review and appeal mechanisms 3.26 If claimants are unhappy with the decision made regarding their eligibility and/or entitlements under the scheme, they may apply to the Patient Claims Panel. This Panel consists of a chairperson who is, or has served as, a judge, and six other members who are appointed for three year terms. The members bring differing areas of relevant expertise to the work of the Panel. The Panel aims to promote fair and consistent application of the terms of the PIA 1996 and issues opinions at the request of claimants, health care providers, insurers or the courts. The Panel is an advisory body and therefore its opinions operate as recommendations only, but there is a high level of compliance. It is estimated that in 10% of claims brought before the Panel their recommendation was that cover be granted by the PFF (Espersson 2000a; Hellbacher et al. 2007; Essinger 2009), with 70% of claims being settled in 6 months. 3.27 On average around 10,000 claims are lodged per year, of which around 4,500 receive compensation, with 50% of the claims being settled at a cost of under £2,000 (see Figure 8). Around 1,000 claims go to the Patient Claims Panel and of these 100 are approved per year. There are around 10- 15 court case per year of which 1-2 are successful. The administrative cost for each claim is 25,000SEK (£2,268) and between 1980 and 2007 a total of 45 payments over the maximum of 8.5 million SEK (£773,000) were made. 33 Figure 8: Sweden - Costs for claims paid in 2006-07 Costs for paid claims (2006-2007) Compensation SEK British pounds % 0 - 9 999 0 - 868 35 10 000 - 19 999 868 - 736 15 20 000 - 49 999 1736 - 4340 26 50 000 - 99 999 4340 - 8680 12 100 000 - 499 999 8680 - 43316 10 500 000 - 999 999 43316 - 86805 1 1 000 000 - 86805 - 1 3.28 We were advised that, although no specific studies had been conducted, the level of under-claiming was estimated as being high. It was suggested that about 10% of patients sustain some kind of injury; this equates to around 100,000 people annually, but only 10,000 claims are received. In an article in the September 2009 Upsala Journal of Medical Sciences, available at http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2853784 Professor Emeritus Henry Johansson notes that: “….international studies have shown that the incidence of adverse events varies between 2.9% and 16.6% among hospital patients. These varying figures are explained in part by the difficulty in defining the concept of adverse event. However, data indicate that about half of the events are considered preventable and about 5% contribute to death. Although extrapolation is difficult, international figures suggest that about 30,000 patients in Sweden (for a population of 9 million) are treated annually for avoidable patients‟ injuries and, for 1,500 individuals, these preventable events lead to death. These figures are in sharp contrast to the official statistics reporting 9,000 – 10,000 patient injuries per year. The data indicate that about 0.2% of all admissions in Sweden result in a patients injury claim.” 3.29 Customer surveys show that 50% were positive about the compensation scheme but others were unhappy with the scheme because: 57% received a letter saying that they had no entitlement under the scheme; Adjudication can be lengthy – for example, it can take 6 months to get a decision and longer to get compensation; and There is insufficient discussion with patients. 3.30 One possible drawback of the scheme was the number of small claims handled, as this can be particularly time consuming. These claims often related to dental injuries. 34 Additional information 3.31 A sample of hypothetical cases was devised by members of the working group, which were evaluated in Sweden by Professor Emeritus Henry Johansson. It is of note that there was a general equivalence in outcome with the current system in operation in Scotland. In other words, cases that would likely be compensated under the Swedish Scheme would also probably attract compensation in the current system in Scotland, or at least this was true of the examples we devised. 3.32 Kaj Essinger, Senior Advisor, Swedish Medical Injury Insurance kindly participated in a video conference in August with some members of the Group to help in our understanding of the Swedish scheme. Figures provided by Kaj show that 99.9% of claims are resolved out of court by an administrative procedure involving 1 claims handler and 1 doctor examining the medical records of the injury, together with a written statement from the doctor involved in the treatment. Similar difficulties to those experienced in Scotland concerning the completeness/vagueness of medical records were experienced in Sweden. Kaj suggested that costs were minimised because treatment for the injury was provided by the state and patients were supported by a good welfare system. The costs associated with compensation of neurologically impaired infants (generally a particularly high cost group in terms of compensation) were around 1/10 of the costs in England, Canada, and France. Conclusion 3.33 We selected the New Zealand and the Swedish models for specific consideration, not just because they are well-established, but also because one is a stand-alone scheme, while the other co-exists with the possibility of litigation; two of the options we identified for consideration in chapter 1. The schemes briefly considered above may differ in funding basis, extent and process, but each has as its goals the facilitation of access to justice, the provision of adequate compensation for injured patients and appropriate adjudication of claims. As will be seen in the next chapter, these are also goals which the working group believes should inform the system of compensation in Scotland. 35 Chapter 4 Analysis of Principles 4.1 At the outset of our deliberations, we asked some fundamental questions of principle which guided our general discussions. What should a no fault system be trying to achieve? Why would we single out medical from other injury? How, if at all, can a compensation scheme meet the needs of those for whom financial payment is not what is really wanted? 4.2 While we were, of course, given a remit that only covered medical treatment injury, we nonetheless felt that some general justification for this was appropriate, since claiming after any personal injury can be both problematic and stressful. The factors already identified in chapter 2 suggest that seeking compensation for medical injury presents specific legal problems and on these grounds alone special consideration could be justified. In addition, we concluded that healthcare was a social responsibility; when something goes wrong it is not unreasonable to argue that society should pick up the bill to put it right in as much as this is possible. We will return to the third bullet point above in chapter 6. 4.3 Consideration of the first question led the group to devise a set of more refined criteria and principles which would be used to test the benefits of different systems for compensating the victims of medical injury. Three separate lists were developed, highlighting those principles that we agree are (i) essential; (ii) desirable; and (iii) associated with wider issues such as patient safety and learning. (i) Essential Criteria The scheme provides an appropriate level of compensation to the patient, their family or carers; The scheme is compatible with the European Convention on Human Rights; The scheme is easy to access and use, without unnecessary barriers, for example created by cost or the difficulty of getting advice or support; People are able to get the relevant specialist advice in using the scheme; Decisions about compensation are timely; People who have used the scheme feel that they have been treated equitably; The scheme is affordable; The scheme makes proportionate use of time and resources; 36 The scheme has an appropriate balance between costs of administration (e.g. financial or time) and the level of compensation awarded; Decisions about compensation are made through a robust and independent process; A reasonable time limit is set for processing claims The scheme has an independent appeal system. The scheme treats staff and patients fairly/equitably. A reasonable time limit is set for compensation claims (ii) Desirable The public in general trusts the scheme to deliver a fair outcome; The scheme does not prevent patients from seeking other forms of non-financial redress, including through the NHS Complaints system; The scheme encourages transparency in clinical decision-making; The scheme contributes to rehabilitation and recovery; (iii) Wider issues The scheme contributes to: organisational, local and national learning, patient safety quality improvement Lessons learned can be used to influence organisational risk management in the future; The scheme encourages and supports safe disclosure of adverse events; The scheme does not put barriers in place for referral to regulators of any cases which raise grounds for concern about professional misconduct or fitness to practise. Before outlining and evaluating specific options for the provision of compensation, one important issue needs to be resolved; namely, the compatibility of the various options with the terms of the European Convention on Human Rights, fully incorporated into UK law by the Human Rights Act 1998. It is taken as read that the current system (even if amended in line with our discussion below) is compatible with the Convention. However, it was necessary to consider whether or not this could also be assumed were we to recommend a move to a no fault system. No Fault Liability and Human Rights Issues1 4.4 Two particular issues fall to be considered under this heading. First, and most obviously, article 6 of the Convention (the right to a fair and public hearing) may have a bearing upon the method and processes of decision- making in this area. There are two questions here: first, whether a move from a system of determination of liability to one of determination that harm has 1 We are most grateful to Professor Jim Murdoch, Professor of Public Law, University of Glasgow for providing us with this section. 37 been occasioned gives rise to any ECHR issue; and second, if so, whether the procedure for determining cases could give rise to incompatibility with fair hearing guarantees. Replacing a system based upon the establishment of fault with one of „no fault‟ 4.5 The question here is whether Article 6 would apply. To qualify as an issue which affects „civil rights and obligations‟ within the meaning of Article 6(1), four conditions must be satisfied: there must be a genuine claim or dispute relating to law or fact; this must relate to a right or obligation recognised by domestic law; the right or obligation must be broadly civil in character; and the outcome of the dispute must be „directly decisive for the right or obligation‟. 4.6 The move to a no fault system of liability would probably satisfy these four tests. First, in the event of a dispute as to whether harm has been caused, there will still be a „dispute‟ as to a matter of fact. Second, any right to compensation embodied in legislation would continue to be a substantive right, and not one based on purely discretionary authority, as the right to compensation would now exist where it can be shown that harm has resulted from a particular activity. It would thus continue to satisfy the „arguable basis in domestic law‟ test, even if compensation were to be payable by a public authority. Third, even if the compensation were to be paid by a public authority upon „no fault‟ principles, this would continue to be regarded as a „civil right‟, as the right has a close relationship with compensation schemes based upon traditional concepts of „negligence‟: in other words, the private law features of such a scheme are liable to be considered of greater significance than any public law elements (as an example, entitlement to social welfare benefits - with the exception of welfare benefits of a purely discretionary nature - is now firmly considered a „civil right‟). The fourth test – whether the outcome of the dispute would determine the right or obligation – would also be satisfied. Procedural determination of questions arising under a „no fault‟ system 4.7 Assuming that Article 6 does apply to disputes arising under the introduction of a „no fault‟ system, the next question would be whether the procedure for determining them would be compatible with Article 6. 4.8 The significant issue here relates to the right to appeal adjudication. A right of appeal to a tribunal-style adjudication agency enjoying an adequate level of independence and impartiality and with sufficient „equality of arms‟ between the parties would certainly satisfy Article 6 requirements, particularly if any defects in fair hearings could be cured upon appeal (or review) on matters of law to the ordinary courts (that is, as long as the ordinary courts have „full jurisdiction‟ - the possibility for the reviewing court not only to consider the complaint, but having the ability to quash the impugned decision and to remit the case for a new decision by an impartial body if the review court does not itself then take the decision). 38 4.9 In fact, there are potentially two positive aspects of a no fault system from the perspective of Article 6. First, the new system could allow for the more rapid disposal of cases which may be both complex and of potentially significant importance to individuals. This could thus be promoted as an important advance in terms of Article 6 obligations. The new procedure might also lead to the more rapid disposal of cases involving medical accidents, particularly in the light of some case law suggesting that exceptional diligence is required where a case is of particular importance to a party (as, for example, in A and others v Denmark where the applicants had sought damages after contracting AIDS). 4.10 Second, while the requirements of Article 6 normally include the right to a public hearing, issues of confidentiality are liable to be addressed with greater care by a system of expert tribunals. There is some case law under Article 8 (the right to private and family life) requiring the careful handling of sensitive personal data relating to health. The move to a no fault system may well enhance protection of private life. 4.11 However, irrespective of whether Article 6 applies or not, it would still be possible for an individual to challenge the determination of an award of compensation using grounds available in administrative law. For instance, it would remain possible for the decision-maker to be challenged as having taken an irrational decision: or one in which the basic principles of natural justice had been denied. Such challenges would be by way of judicial review in the Court of Session. This is, however, an expensive procedure and should this become a regular feature of a „no fault‟ system, could potentially undermine the entire system. 4.12 In short, the issue of fairness in the determination of awards for compensation cannot be considered only by reference to human rights principles. Positive obligations of the ECHR 4.13 Of crucial importance is the question of whether a no fault system would permit the discharge of a State‟s positive obligations towards patients. This is most obviously relevant in relation to the need to ensure the careful scrutiny of the circumstances in which a patient has died while receiving medical treatment. The European Court of Human Rights has been expanding the scope of the important positive obligations upon a state to ensure that the right to life – under Article 2 - is an effective right. This complements the need for the provision of effective remedies under Article 13. 4.14 An indirect example of the application of this principle arose in the case of Vo v France in which an individual had been forced to undergo an involuntary therapeutic abortion as a consequence of medical error. The question before the Court was whether domestic law had adequately protected the right to life of the unborn foetus. Since an action for damages had been available and the applicant had not made use of it, the question was avoided and no violation of Article 2 was established, although the Strasbourg 39 Court did reaffirm the existence of a positive obligation to ensure that domestic law was adequate to ensure that medical staff could be called to account if they failed to protect patients‟ lives. It is highly unlikely that the proposed no fault system would not recognise the right to compensation in such a case. Whether it would also hold negligent medical staff to account through judicial processes is, however, not as clear. In other words, it may also be necessary to approach the question as to whether other Convention guarantees (in particular, Articles 2 – the right to life, article 3, prohibition on torture or inhuman and degrading treatment and article 8, the right to private and family life are fully addressed. 4.15 The key notion is that in certain cases (again, most obviously, in relation to loss of life, but also in respect of other outcomes in which an individual may claim to have suffered treatment contrary to the Convention) there must be an effective investigation into the circumstances giving rise to the loss of life, etc. The premise is that without this, the right would be merely theoretical. 4.16 Initially, a procedural requirement to carry out an effective investigation in order to ascertain whether the loss of life could have been avoided, etc originated in cases in which state officials were involved in the taking of life during policing incidents. Thereafter it was extended to cases in which the state has a particular duty of care (e.g. in relation to persons detained by the State). Subsequently, it has been further extended to cases involving the provision (or failure to provide) medical services in certain circumstances in which an individual may have an arguable claim to be a „victim‟ of a violation of the Convention. It is important to emphasise that the obligation will only arise in certain circumstances. 4.17 The obligation to carry out an effective investigation is designed not only to examine the actual instance in which, for example, loss of life occurred, but also to examine whether the management and organisation contributed to the harm or loss of life. 4.18 Further, the obligation is one of means. If responsibility arises, it should be addressed. This does not necessarily mean that domestic law must punish instances where loss of life has occurred in the criminal courts: indeed, in the area of medical provision, it is highly unlikely that the responsibility would so extend (unless there were cases in which taking of life was deliberate). There are now, however, strong suggestions that health services must have rigorous procedures in place to examine, for example loss of life or other treatment falling short of acceptable standards and resulting in serious ill-treatment. 4.19 In cases of medical maltreatment, the civil law clearly discharges this function: in determining whether there is right to damages, a court would be required to determine the facts, and adjudicate on the issue where there have been shortcomings. In short, individuals at fault can be named and action can be taken thereafter. 40 4.20 A vitally important key issue for a no fault scheme of compensation, then, is whether it or a parallel process would provide the rigorous examination of alleged serious mistreatment needed to permit the allocation of some form of personal responsibility. We return to this question in chapter 5. 41 Chapter 5 Options Considered 5.1 As explained in chapter 1, the following five options were identified for consideration: a. Establishing a no fault system to run alongside the existing system; b. Establishing a no fault system and abandoning the existing system; c. Simply retaining the existing system in its present form; d. Recommending retaining the existing scheme with certain improvements; and e. Establishing a no fault system to run alongside an improved version of the existing system. 5.2 The principles that we identified as being essential to a compensation scheme can broadly be summed up as amounting to the need for accessibility, fairness, appropriateness of compensation, timeliness of adjudication and cost-effectiveness. Account of each of these elements will be taken in what follows. The human rights considerations have already been dealt with in chapter 4, but where relevant they will be referred to in this chapter also. 5.3 It should be noted that the possibility of establishing a no fault scheme in Scotland was considered some years ago. The Report of the Expert Group on Financial and Other Support in 2003 (Lord Ross‟s report) concluded that no fault compensation may have advantages, including: speed; ease of access; reduction in legal costs; and reduction of stress for both claimants and health professionals. However, the report also considered that there were disadvantages to no fault schemes, in that they tend not to encourage improvements in quality of care as a result of lessons learned. Furthermore, in both Sweden and New Zealand, because the issue of fault had not been entirely eliminated at that time, the Report argued that the end result was a bureaucratic system which tried to tackle the complex issues of negligence and causation without the benefit of legal expertise. It was concluded that these were major disadvantages and the Expert Group ultimately declined to recommend the introduction of a general no fault compensation scheme. Accordingly, the report concentrated on making recommendations designed to improve the current systems for resolving health service disputes. 5.4 We now turn to the options identified in our consideration of this matter. (a) Establishing a no fault scheme to run in parallel with the existing system (i) In terms of our inquiry, it was agreed that if a no fault system was introduced it should cover: Anyone who was injured resulting from medical treatment (medical injuries may result as well from the acts or 42 omissions of non-professionals – such as a secretary failing to transmit details of an essential clinical appointment); Injury sustained in Scotland; and Both NHS (including independent contractors) and private healthcare provision. (ii) We also agreed that rather than attempting to define those injuries which would be covered by the scheme, it was preferable to list those that would be excluded. Finally, we agreed that we did not favour the use of a tariff system for compensation, as this would not address individual needs and in any case it was felt to be unlikely that people would buy into a system where compensation was based on a tariff basis. This, therefore, points to levels of compensation equivalent to those that would be awarded by a civil court. (iii) We also recognise that there are potential financial implications arising from the potential for increased numbers of eligible claims under a no fault scheme, since certain of the barriers to successfully claiming under the existing scheme (such as the need to meet the Hunter v Hanley test) would no longer apply. However, we also bear in mind that, given that evidence of causation remains a requirement in a no fault scheme, potential claimants may still find themselves excluded from compensation, which will also have an effect on costs (iv) Were a no fault scheme to operate in parallel with the existing system, it seems feasible that a number of people who fail under one scheme would then attempt to obtain compensation under the other. This would add to overall costs. If this is seen as a problem that should be avoided, then it would be necessary to devise distinct eligibility criteria for each scheme to avoid „double dipping‟. (v) For many people access to a good no fault system is likely to be preferable to litigation (all the evidence is that people do not want to go to court) and that this will make the danger of double dipping unlikely to happen in practice. On the other hand, we believe that individuals who fail in the courts should have a right to try again through the no fault scheme – because the burden of proof in the former is considerably higher. We do not believe that those who succeed in the no fault scheme should then be entitled to use that decision to launch litigation, unless any damages awarded by the no fault scheme are deducted from any court-authorised award. (vi) In human rights terms, the new system would also require to have an appeals system built in, with ultimate recourse to the courts on matters of fact as well as law, potentially leading to protracted (and costly) proceedings. Moreover, if the new system were to co-exist with the current one, the flaws identified in the current situation would continue to exist. The goal of ensuring accessibility and affordability would, therefore, only be partially met, if they are met at all. Equally, 43 the problems regarding the availability of specialist advice would remain. (e) creating a no fault system to run in parallel with an improved version of the existing system (i) Although this is out of sequence, it makes sense at this stage to consider (e) above; namely the establishment of a no fault scheme to sit alongside an improved version of the current system. While the potential problems associated with possible „double dipping‟ would remain, remedying some of the problems identified in the current scheme (see chapter 2) might better equip the combined systems to meet the principles that we have identified as being essential. In what follows, we consider suggestions as to potential improvements to the existing system, based on the problems which were identified in chapter 2. (ii) Length of time: many reparation claims can take months, if not years, between initial investigation and final resolution by way of judgement or settlement. This is one of the major failings of the current system, yet this is an area where reform could be made and could lead to efficiency savings. One of the most striking features of the existing Scottish system is that, in stark contrast to England, and indeed stark contrast to other types of claims even in Scotland (such as personal injury claims or non-medical professional negligence claims), there is no framework which regulates how potential claims should be made, processed or resolved. (iii) The main legal time limit is that court proceedings must be commenced within 3 years of the date of the negligence happening or coming to light, or in cases involving children, by the child‟s 19th birthday. While Court procedures have been reformed (and further reforms will follow as a result of Lord Gill‟s Scottish Civil Court Courts Review), these reforms to Court procedure do not deal with the vast majority of claims that are made and resolved without the need for litigation and within the three year period. (iv) While England has had a pre-action protocol for a number of years, Scotland has been slower to follow suit. A voluntary pre-action protocol was introduced on 1 January 2006 in respect of personal injury cases and a voluntary pre-action protocol in professional negligence (non- medical) cases is also now in place in Scotland. Unlike in England and Wales, there is no statutory basis for these pre-action protocols. They are, however, widely used and followed in other areas of law in Scotland. (v) Delay in disclosure of information: parties frequently do not „show their hand‟ until the parties are well advanced into the adversarial process. 44 (vi) Those representing clinicians complain of not being given sufficient notice of the factual allegations by those representing the patient as to exactly what is being alleged so that a proper investigation can be carried out. Those representing the patient complain of not being given information regarding internal Critical Investigation Reports and not being able to obtain access to the medical practitioner or colleagues to obtain a factual statement as to what happened. This can lead to a patient‟s case being dependent on the contents of what happens to be in the medical records, whereas there may be other relevant evidence not known to the patient or the patient‟s representative. This information sometimes is not disclosed /shared/ reciprocated until matters are well advanced. (vii) At present, the quality of internal Critical Incident Reports varies from operational unit to operational unit and whether those reports are disclosed to the patient also varies from hospital to hospital. Consistent disclosure of such reports at an early stage so that material and relevant facts are identified would reduce the identified delays. (viii) Delay in focussing the issues: crucial issues in the dispute frequently do not become focussed until late into the investigation. Problems can arise in practice because of the mobility of medical personnel who can frequently rotate from one job to another as part of a natural career progression. Imposing an obligation on health staff to co-operate with previous employers would enable potential claims relating to them to be dealt with more swiftly. (ix) A problem can frequently be encountered in terms of the provision of reports by independent medical experts. Experts, who it should be noted are entirely voluntary, if they are to accept instructions could be required to agree to provide a report within a certain period of time. (This can bring its own problems as the pool of available experts in a number of specialities, is small). Early identification of all relevant issues and disclosure of those issues would reduce the likelihood of delays and would enable detailed information to be provided by clinicians while events are still comparatively fresh in their minds, enabling earlier exploration of issues with a view to resolution before parties become entrenched in a long running adversarial process. (x) Uncertainty of outcome: parties sometimes have no idea as to the likely outcome until the adversarial process is well advanced. No system is perfect in terms of certainty, but the stress associated with this could be reduced by much swifter negotiation and resolution through an agreed set of procedures, particularly if those procedures are designed to reduce the need for parties to proceed to or threaten litigation. (xi) Perception of lack of openness: there is a perception by many claimants that there has been a lack of openness by clinicians or those representing clinicians. It is the perception of some clinicians and 45 representatives that clinicians will apologise for an obvious error, but the reason that an apology might not be made is that the clinician might only know there has been negligence once an opinion is obtained from an independent expert as to whether the treatment in question was negligent or not. (xii) From the perspective of those representing patients there is a perceived reluctance on the part of clinicians to acknowledge error. It may also be that while some clinicians are prepared to tell a patient about an error, with or without an apology, patients‟ representatives are clear that a significant number do not. Further, even of those clinicians who may be prepared to advise a patient of an error, not all will agree on what is an obvious error and so clinicians will have „variable thresholds‟ for disclosure. From a professional standpoint, the GMC makes the position clear. (xiii) Section 30 of the GMC Guidance of „Good Medical Practice‟ states that: “if a patient under your care has suffered harm or distress, you must act immediately to put matters right, if that is possible. You should offer an apology and explain fully and promptly to the patient what has happened, and the likely short term and long term effects.” (xiv) Section 31 continues “Patients who complain about the care or treatment they have received have a right to expect a prompt, open, constructive and honest response including an explanation and, if appropriate, an apology. You must not allow a patient‟s complaint to affect adversely the care or treatment you provide or arrange.” (xv) That the patient should have a right to know in England and Wales is reflected at page 25 of the Coalition Government Programme published on 20 May 2010 which states „we will require hospitals to be open about mistakes and always tell patients if something has gone wrong‟. Increased disclosure and sharing of Critical Incident Investigation reports would also reinforce this ethos of openness. (xvi) Access to Justice: there is a significant shortage of solicitors and advisors who have the expertise to deal with medical negligence cases in Scotland. As a result, many claimants can receive poor or inadequate advice, with a low number of cases leading to „satisfaction‟. This can also lead to „Inequality of arms‟ – clinicians will generally be represented by specialist lawyers, but patients frequently are not. (xvii) This is a major issue in Scotland, where there are only 6 accredited claimant clinical negligence specialists. A significant factor is the lack of resourcing and training for lawyers and representatives in this field. At present, advice and support to NHS service users is 46 available through the Independent Advice and Support Service (IASS) which is currently provided through the network of the Citizens‟ Advice Bureau (CAB). The current contracts for the provision of IASS are due to expire on 31 March 2011 when the service will be replaced by the Patient Advice and Support Service (PASS) under the proposals set out in the Patient Rights (Scotland) Bill currently going through Stage 1 consideration in the Scottish Parliament. (xviii) What should be a comprehensive network of solicitors in private practice throughout Scotland is, in fact, patchy. Consideration needs to be given as to how to improve and increase access to justice. In addition, it should be considered whether a review of legal aid rates and the fee structure would attract practitioners prepared to deal with this type of work. This would also help to redress the current imbalance between clinicians generally having expert representation and patients frequently being without it. (xix) Expenses: many patients who have suffered injury feel unable to take matters forward because of the expense of instructing a solicitor, or an inability to recover all expenses even if successful. At present, there are four main avenues of potential funding open to a client, namely: legal aid/legal advice and assistance through the Scottish Legal Aid Board, assuming the client is financially eligible; the client pays solicitor fee on a private basis; „before the event‟ insurance, typically a DAS type household insurance covering legal expenses (this is comparatively unusual). This insurance covers the legal costs involved in pursuing or defending a claim. Legal costs include the appointment of solicitors, barristers and expert witnesses; or „after the event insurance‟ frequently in conjunction with a „no win no fee‟ speculative agreement. It is, however, unusual for a solicitor to take on a clinical negligence case on a speculative basis because of the highly risky nature of the case and the considerable expense of the insurance premium which can run into thousands of pounds. In addition, even if the client is ultimately successful in the claim, the client cannot recover the insurance premium. In England, the „after the event‟ insurance premium can be recovered as part of the legal costs if the party is successful. We noted, however, that proposals, from Lord Justice Jackson‟s review of civil litigation costs strongly recommend that recovery of after the event insurance premiums be abolished in England. (xx) Although changes have been made to the availability of legal aid to take a case to Court, these changes do not affect the vast majority of potential claimants who seek to resolve their case without litigation and who are dependent on legal advice and assistance, which has more limited eligibility criteria than full legal aid. 47 (xxi) Disproportionality of legal expenses: the legal expense of investigating and pursuing the claim can be disproportionate to the value of the claim. At present, similar steps can be taken by both claimants and defenders regardless of the value of the claim. A complex report on Hunter v Hanley negligence may require to be obtained from an expert irrespective of the value of the case. Similarly, reports on causation can be just as expensive for low value claims as for high value claims. It is, of course, possible that the parallel existence of a no fault scheme might encourage claimants to use this when the value of their claim is low and, if so, this would be a direct benefit. (b) creating a stand alone no fault scheme and abandoning the existing system (i) The reported benefits and drawbacks of no fault schemes have been discussed above, and are also spelled out in more detail in Volume II of this report. In terms of meeting the elements we have regarded as essential to an appropriate scheme, many can be satisfied by the introduction of an accessible scheme that is effectively cost-neutral to the claimant and efficient in its processes. However, we do foresee some potential problems. (ii) By and large in no fault systems for largely financial reasons there may be, or develop, a tendency to impose increasingly restrictive eligibility criteria which deny individual claimants the benefit of easy access. This outcome seems plausible where the scheme is state funded, even if it does not cover all personal injury and is limited to medical injury. That being so, while administrative costs may be lower (especially if one takes into account the costs associated with legal representation in the current system), the costs of compensation might either be equivalent or, if an increase in claims results from the easier access to justice postulated under a no fault scheme, potentially considerably increased. (iii) Given that financial compensation is not the only - or even the primary – desired outcome (see discussion in chapter 6) schemes such as the New Zealand Accident Compensation Scheme which inherently address the need for additional support and rehabilitation may make lower financial settlements more acceptable. Of course, there are costs associated with rehabilitation, but for the moment these are incalculable. However, even if they are significant, the availability of continued support may encourage a perception of fairness in the system. Arguably, the absence of a „blame culture‟ would satisfy the imperative to ensure that staff are also treated fairly. (iv) Nonetheless, there may be issues about the acceptability of removing the right to litigate. In a society such as ours, where a rights- based culture is deeply ingrained, loss of the right to litigate might be 48 seen as a step too far. On the other hand, the potential benefits in terms of eligibility might make this more palatable. Although the right to litigate might be reduced, the ability to receive compensation might be strengthened. (v) Finally, assuming that the system has adequate in-built appeals procedures, with a final appeal to the courts, in this respect it would be human rights compatible. (c) Simply retaining the existing system in its present form From what has been discussed above, it would seem that this would not be an option that would satisfy many of the essential elements in a compensation scheme that we have identified above. (d) Recommending retaining the existing scheme with certain improvements Possible remedies for some of the problems identified in the current scheme (see chapter 2) have been discussed above at (e). From these discussions, even with improvements, it would seem that the existing system would not satisfy many of the essential elements in a compensation scheme we have identified above. Evaluating the options 5.5 We tested the existing medical negligence system, the existing system with the suggested possible improvements discussed above, together with the New Zealand and the Swedish system against the principles and essential criteria set out paragraph 4.3. The Swedish model came out on top meeting more of the criteria than any of the others. We were also impressed by the New Zealand system‟s direct and specific emphasis on rehabilitation, and consider that this should be a central focus of any revised scheme in Scotland, particularly given that the main priorities of many patients seem not to be financial. Conclusions 5.6 Before outlining our final recommendations, as we indicated earlier there are a number of issues outside of the legal system itself that, we believe, require consideration as they seem likely to have a direct impact on the actual quality of any system proposed and may also have an effect on take-up and therefore on fairness, costs and a number of the other elements that we regard as essential to whatever scheme is recommended. 49 Chapter 6 Additional Considerations 6.1 As we noted earlier, a number of issues came to light in the course of our discussions that the review group believes are relevant to the likely success of any system agreed upon. While we were not invited to consider issues beyond those directly related to the legal basis for liability, we offer some thoughts on these associated matters in this chapter in the hope that they may be of some interest and assistance. What patients want 6.2 At the outset of our discussions, we sought to identify what we, as a group, considered a compensation system should be trying to achieve. We agreed that this was not just about financial compensation; rather the objective should be to restore the person who had been harmed to the position they had been in prior to the injury, as far as this is possible. This will include restoring their ability to function as well as possible. Non-financial assistance, such, for example, as rehabilitation, the provision of aids and appliances, as well as some investment in the restoration of trust and rebuilding of the relationship with healthcare professionals so that a patient feels confident to go back to same practitioner or institution are fundamentally important. 6.3 Our research team (Farrell et al, 2010) reported that previous research suggests that when an error has occurred, patients expect doctors to make a meaningful apology, provide an explanation and take steps to prevent the error from recurring (Allsop 1994, Hickson 2002, Hickson et al 1992, May and Stengel 1990, Mazor et al 2004, McCord et al 2002, Vincent et al 1994, Witman et al 1996). To a much lesser extent, injured patients wanted financial compensation (Mulcahy et al 1996, Shapiro et al 1989, Genn and Lloyd-Bostock 1995), and compensation is usually discussed in the context of meeting a particular need (Genn and Lloyd-Bostock 1995). The research team‟s results from their discussions with pursuers and other stakeholders are broadly similar to these earlier studies. However, as previous research has largely taken a quantitative approach; there has been little in-depth consideration of what pursuers really mean by an explanation, prevention of future errors, apology or compensation. Nonetheless, there does seem to be evidence to support the contention that for many, if not most, patients their primary aim is to obtain an apology, an explanation and some reassurance that the system will learn from the experience. This is a very different process from that of allocating individual blame. However, it does require a culture in which honest and open conversations are encouraged and facilitated. 6.4 We consider that in order to benefit patients, clinicians and the service as a whole, a change in culture is needed; there needs to be a willingness to discuss adverse incidents in order to enable learning. This would potentially reduce or remove the apprehension of involved staff; reduce the focus on 50 blame and negligence; and foster the ability to be open and honest at an early stage. Patient safety should be the primary consideration and it was noted that doctors and other healthcare personnel have a professional obligation to explain and apologise where appropriate. 6.5 There was consensus in the group that an effective complaints procedure should facilitate and encourage open disclosure. The group was of the view that a no fault system in itself would contribute directly to a more open and less defensive culture. 6.6 The idea of introducing a statutory Duty of Candour on healthcare organisations was raised but there was no consensus reached on this by the group. Complaints procedures and legal claims 6.7 A difficulty that the Review Group has faced throughout its deliberations has been the wish not to stray from its remit. The Review Group has sought to focus on its immediate remit of examining compensation systems, while at the same time not ignoring related issues such as the operation of the NHS Complaints Procedure. 6.8 This is a significant issue for patients and their advisers. The fact that intimation of a potential claim for compensation brings a complaint under the NHS Complaints Process to an end causes a major problem for patients: effectively it means that patients have to choose between making a complaint and raising an action seeking compensation. While it may be the case that those seeking financial compensation will proceed directly to attempt litigation, we nonetheless feel that this situation should be remedied as it creates an unnecessary disconnection between the issue of compensation and the issue of non-financial remedies such as an apology/explanation/ prevention of recurrence, whereas in reality all of these issues are inextricably linked. 6.9 A view was expressed that one important practical difficulty with the present situation is that a potential claim for compensation frequently has to be „parked‟ while the NHS Complaints Process runs its course. However, the complaints statistics for 2008-09 show that around 70% of complaints are responded to within the 20 day deadline and the median is 18 days. If the complaints procedure is entered into in the right spirit by both parties, it has the potential to deliver on issues that are vitally important for the patient. 6.10 The rationale behind the current system is that if a complaint were to continue when a claim for compensation is also proceeding, this would somehow inhibit open disclosure by healthcare staff. and professionals. Because the current system for compensation is based on negligence, it contributes to a culture which makes it harder for health professionals to be open and honest about what has happened. While there are professional guidance and ethical guidelines in this area, these in themselves do not ensure that health professionals respond in a way which contributes to openness. 51 A Right to Complain 6.11 We noted that provisions in the Patient Rights (Scotland) Bill, introduced to the Scottish Parliament in March 2010, provide for a specific right to make a complaint. 6.12 The Policy Memorandum concerning the „Right to Complain‟ that accompanied the Bill presented to Parliament and available at: http://www.scottish.parliament.uk/s3/bills/42-PatientRights/index.htm. states: The aim is to improve patients‟ awareness of their right to lodge a formal complaint and also to help ensure that patients have a better understanding of how their complaint will be dealt with. The Bill repeals the Hospital Complaints Procedure Act 1985 which placed a duty on health authorities in England and Wales and Health Boards in Scotland to establish a complaints procedure for hospital patients. This will be replaced with the measures outlined in the Bill and with further measures in secondary legislation. The Bill also legislates for the handling and monitoring of complaints and how these can be used to improve health services. It is intended that when a patient makes a complaint they should be informed also of the advice and support available to them. Through secondary legislation and directions, the Scottish Government will set out clearer monitoring procedures and feedback mechanisms, to assist in using complaints to improve the health service, and will amend timescales to respond to complainants with the result of an investigation. From the Making It Better research on the complaints process, it was apparent that differences between hospital complaints processes and primary care complaints processes may be confusing for complainants, and that there was some concern about the capacity to properly investigate a complaint within the shorter timescale in primary care complaints processes.‟ 6.13 There is also a logical inconsistency in the current situation. We conclude that consideration should be given to the benefits of the proposed regulations and guidance in the Patient Rights (Scotland) Bill being written so as to allow compensation claims to be pursued without affecting a patient‟s right to have a complaint investigated under the NHS Complaints Process. A letter was submitted by the Chair of the No-Fault Compensation Review Group to the Patient Rights Scotland Bill team in September requesting this be considered. 6.14 It is worth noting that the Welsh Assembly Redress scheme proposes that redress and complaints will be considered under one system. 6.15 On a practical level in many Health Boards, complaints procedures tend to be dealt with by different personnel from those dealing with claims. Consideration may therefore need to be given to whether there would need to 52 be redeployment or retraining of NHS staff to avoid unnecessary duplication of work. 6.16 Part of that consideration will need to take account of the fact that the SPSO provides an independent and free service for the consideration of escalated complaints, including those about the NHS. The work of the SPSO is governed by the provisions of the Scottish Public Services Ombudsman Act 2002. 6.17 The role of the SPSO in complaints about health services is unique in its portfolio in that it can consider both maladministration and clinical judgment. In all other areas of its jurisdiction, the SPSO cannot consider discretionary (professional) decisions taken in the absence of maladministration. 6.18 The provisions of the 2002 Act are such that the SPSO is precluded by statutory restrictions (specifically Section 7(8)) from considering matters of complaint where an individual has (or had) a right of remedy and redress through a legal avenue. Where individuals pursue legal action with an expressed intention to secure financial compensation, the SPSO will not normally accept a parallel referral for consideration. 6.19 This is a significant consideration where any suggestion concerning the alignment of complaints and compensation processes in the NHS is concerned. Whilst their alignment would provide for clear benefits in the patient experience, it would potentially have the perverse effect of reducing their rights in administrative justice terms. 6.20 It is suggested that the one way of tackling this and other issues relating to the effective functioning of the NHS complaints procedure, is to direct the group‟s findings to the SPSO so that they can be considered in the context of the Ombudsman‟s work in developing a Complaints Standards Authority (CSA) under new powers provided by the Public Services Reform (Scotland) Act 2010. 6.21 Through its new CSA function, the SPSO has recently consulted on a framework of core complaint handling principles for public services in Scotland that will be put to the Parliament for approval in the autumn of 2010. The SPSO will be working with key interests (including the NHS) across 2010- 2011 to ensure that the agreed principles are adapted to best meet sector specific needs and circumstances. This provides an ideal opportunity for the additional considerations covered in this chapter to be effectively addressed in a consistent and coherent way. A „Joined-up‟ System? 6.22 We acknowledge that while the complaints process, adverse incident reporting and learning are not strictly speaking essential elements of a compensation scheme as such, there was agreed to be a need to be careful about these processes and ensure more „joined up‟ thinking. The group 53 identified the need to separate learning from disciplinary processes and the need to share outcomes to prevent further incidents occurring. We also agreed that any recommended system should include drivers to maintain standards and protect the public. It is important to keep the patient perspective in view and to reassure the public that poor practice is being addressed efficiently and effectively. There is, we believe, an opportunity to provide a better, more consistent, system for dealing with complaints which could both complement and supplement whatever system of liability is in place. 6.23 Discipline was also a real and current issue. Open, early and accurate disclosure could reassure medical and healthcare staff that their jobs and reputations were not at risk. We acknowledge that healthcare staff work within a system, and that in some instances the fault might not lie with the individual but rather with problems inherent in the system itself. We consider that investigation of an incident, and learning from it, are and should be separate from disciplinary procedures and that each system should be designed to operate in a way that does not inhibit in any way the aims of the other. Openness and robust investigative mechanisms within the delivery system of healthcare services seem likely to meet the needs for systems to learn, while avoiding unnecessary stigmatisation of individual personnel. Conclusion 6.24 Although technically beyond the terms of our remit, members of the group felt strongly that parallel amendments, such as those mentioned above, could contribute to overall improvements to patient experiences, as well as improving relationships between healthcare professionals and patients. 54 Chapter 7 Conclusions and recommendations 7.1 From our discussions and the evidence we have gathered, it seems clear that the current system is not meeting the needs of patients, and potentially creates an atmosphere of tension between them and their healthcare providers. In addition, the widely accepted view that patients are more interested in a meaningful apology, an explanation and assurances about future practice was reinforced by the research team‟s findings. The current system of litigation may result (in a small number of cases) in the award of financial compensation, but it clearly cannot – and does not purport to – address these issues. 7.2 The number of claims paid out in Scotland is low relative to the rest of the UK and other jurisdictions but claim costs have been increasing in recent years. However, in addition to the costs of settled claims, Central Legal Office (CLO) incurs costs and outlays in claims that are not settled. On some occasions, NHS Health Boards will make a payment to the claimant for fees incurred by the claimant even where the claim is not settled. The total of the costs for unsettled claims has risen over the years from around £300,000 to over £1M. The researchers‟ survey of costs indicates clearly that significant costs are incurred for unsettled claims and that the costs associated with small claims have been rising and currently can be greater than the awards made. 7.3 The nature of the proposed scheme itself suggests that administrative costs will likely be lower than the costs associated with litigation. It is, of course, the case that if the right to litigate is not fully removed some injured patients may prefer to use the existing system; these costs will remain in these cases. However, based on the evidence we have received as to what patients actually want to achieve, it seems likely to us that fewer people than at present will resort to litigation. 7.4 The research team has provided a paper which suggests on the basis of assumptions made that the proposed scheme will not lead to expenditure greatly above that of the existing scheme. The paper assumes a 20% increase in claims under the proposed scheme and that 40% of the claims which fail under the litigation system would receive an award under the proposed „no-fault‟ scheme. It also assumes that the additional claims will be low value claims. Further analysis may be necessary to test the validity of these assumptions as a previous analysis for Lord Ross‟ report in 2003 and the Making Amends report of the Chief Medical Officer in England (also in 2003) assumed an 80% increase in claims. 7.5 The concept of no fault is not entirely foreign in UK law, and in our report we briefly explore some of the schemes that currently operate on this basis. These have, however, been reserved for relatively narrow purposes and a large number of personal injury claims still require to be raised using the current medical negligence framework. 55 7.6 We explored several well-established no fault schemes in other jurisdictions with a particular focus on the New Zealand and Swedish models. Although these two schemes differ in funding basis, extent and process, each has as its goals the facilitation of access to justice, the provision of adequate compensation for injured patients and appropriate adjudication of claims – goals which the review group believes should inform the system of compensation in Scotland. 7.7 In addition, the emphasis, particularly in the New Zealand Scheme, on rehabilitation, as well as financial compensation to meet needs, was welcomed by the group. If the aim is to restore people to the position they would have been in but for the injury, this may be achievable by the provision of non-financial support in addition to any financial compensation deemed to be appropriate to the circumstances. Investment in this area would supplement existing provisions, thereby also benefiting healthcare provision in general and the NHS as a whole. 7.8 While we appreciate that this is not unproblematic, the principles we identified should, we believe, apply to all medical injury and not simply those that arise in the NHS. The rationale for this is clear; if there are benefits to be obtained from the no fault approach, these should be extended to all people injured as a result of healthcare provision (or non-provision). However, some members of the group believe that this may prove to be difficult in respect of independent contractors and private practice. If including these groups in the no fault scheme proves impossible, we would nonetheless support its introduction in the NHS. We nonetheless repeat our preference that the no fault scheme applies to all patients. 7.9 We are satisfied that a no fault scheme as we describe it would be fully compatible with human rights requirements, based in particular on the need – as in Sweden and New Zealand – to build in appropriate appeals mechanisms, with an ultimate right to appeal to the courts on a point of fact or law. In addition, retention of the right to litigate will ensure that those for whom the no fault system is felt to be inappropriate will still be able to raise claims using this route. However, in light of our criticisms of the current litigation system in medical cases, consideration of the amendments we suggest would be important. 7.10 While even no fault schemes require eligibility criteria to be met, the lack of a need to establish fault will make the scheme more open to injured patients. However, these criteria need to be clearly described; from our perspective this can best be done by describing those injuries that will not be eligible under the scheme - for example known and consented to risks of treatment. 56 7.11 We therefore offer the following recommendations for consideration: Recommendation 1. We recommend that consideration be given to the establishment of a no fault scheme for medical injury, along the lines of the Swedish model, bearing in mind that no fault schemes work best in tandem with adequate social welfare provision; (it should be noted that the welfare and social care systems in Sweden are highly developed and more inclusive than the current UK situation and are paid for by taxation, which is higher than in the UK.) Recommendation 2. We recommend that eligibility for compensation should not be based on the ‘avoidability’ test as used in Sweden, but rather on a clear description of which injuries are not eligible for compensation; Recommendation 3. We recommend that the no fault scheme should cover all medical treatment injuries that occur in Scotland; (injuries can be caused, for example, by the treatment itself or by a failure to treat, as well as by faulty equipment, in which case there will be third party liability); Recommendation 4. We recommend that the scheme should extend to all registered healthcare professionals in Scotland, and not simply to those employed by NHSScotland; Recommendation 5. We recommend that any compensation awarded should be based on need rather than on a tariff based system; Recommendation 6. We recommend that claimants who fail under the no fault scheme should retain the right to litigate, based on an improved litigation system; Recommendation 7. We recommend that a claimant who fails in litigation should have a residual right to claim under the no fault scheme; 57 Recommendation 8. We recommend that, should a claimant be successful under the no fault scheme, any financial award made should be deducted from any award subsequently made as a result of litigation; Recommendation 9. We recommend that appeal from the adjudication of the no fault scheme should be available to a court of law on a point of law or fact. Recommendation 10. We recommend that consideration should be given to our analysis of the problems in the current system, so that those who decide to litigate can benefit from them. 58 Appendix A Chair: Professor Sheila McLean, School of Law, Glasgow University Name Representing Dr Paul Allan Scottish Academy of Medical Royal Colleges Dr Ian Bashford NHS Medical Director, representing the Scottish Association of Medical Directors Hazel Borland NHS Patient Focus and Public Involvement Director Steve Carney Scottish Public Services Ombudsman Jim Rodger Medical and Dental Defence Union of Scotland Frances Elliot NHS Chief Executive Michael Fuller NHS Staff Partnership Forum Kelly Johnson (replaced Health Professions Council Michael Guthrie Nov 2010) Dr Robert Hendry Medical Protection Society Andrew Lamb British Dental Association Scotland Ann Logan (replaced Law Society Fred Tyler Dec 2009) Liz Macdonald Consumer Focus Scotland Geraldine Macdonald Patient Representative Ranald Macdonald Central Legal Office Ken Mackinnon (Jan 2010) Academic - Robert Gordon University Clare Mayo (replaced Royal College of Nursing Scotland Rebekah Male Jan 2010) Christina McKenzie Nursing and Midwifery Council Professor Kenneth Norrie Academic – Strathclyde University Paul Philip General Medical Council Andrew Pollock Pursuer Solicitor Gillian Smith Royal College of Midwives Dr Hugh Stewart Medical Defence Union Lauren Sutherland Advocate Peter Terry British Medical Association Angela Timoney Royal Pharmaceutical Society Peter Walsh Action against Medical Accidents Margaret Watt Scotland Patients Association Scottish Government support: Andrew MacLeod – Head of Patient and Quality Division (retired March 2010) Fiona Montgomery – Patient and Quality Division Sandra Watson – Senior Medical Advisor (left Jan 2010) Alastair Pringle – Equality and Diversity Manager Paul Allen – Civil Law Division Sandy Kinnear – Health Finance (retired June 2010) Edythe Murie - Legal Directorate Sandra Falconer – Patient and Quality Division Research Team A research team led by Professor Frank Stephen, Manchester University, was appointed in November 2009 59 Appendix B A Limited No Fault Scheme 1. Finally, we also considered whether or not the establishment of a scheme specific to neurologically impaired infants should be created (in the event that a general no-fault scheme is not introduced). This group of patients arguably represents a special case and certainly accounts for the most significant sums awarded in compensation and legal costs. Although this was discussed and discounted in England, we believe it to be worthy of consideration here and what follows provides an outline of a possible approach in which the future care component of any compensation would be provided in the form of a guarantee of delivery of services (both medical and social care) to meet the needs of the child, instead of by way of a monetary sum. 2. The amount paid out by Health Boards in damages has risen by more than 200% over the past four years (05/06 to 08/09) although the number of claims has remained relatively stable (lower in 08/09 than in the previous three years). A major contributor to the damages paid out is the small number of claims that involve catastrophic injury, and a significant proportion of such claims are likely to be in relation to babies born with severe neurological impairment. At present, only those children who can establish that they have suffered an injury as the result of negligence can recover damages, which will cover all losses past and future (so far as money can assist in this) caused by the negligence. In cases where damages are recoverable, the Law Reform (Personal Injuries) Act 1948 provides that „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 ….National Health Service (Scotland) Act…‟ This provision means that NHS money used to compensate these injured children for their care needs must be paid from NHS funds and it flows out of the NHS into the private sector. Large awards can reach £5-6 million and higher in Scotland. 3. Children who suffer non-negligent birth injury in the course of their medical care, receive no compensation, yet their care needs are essentially the same as children who have been negligently injured (as indeed are the care needs of children with congenital abnormalities which lead to severe disability at birth who also do not qualify for compensation). 4. If a no fault scheme incorporating rehabilitation and ongoing support were to be instituted for neurologically impaired infants, then the future care component could be met by a guarantee that the child‟s ongoing medical and care needs would be met by the state (initially, this is likely to involve commissioning much of that care from the private sector, but, over time, the cost savings available - and economies of scale for less remote parts of NHS Scotland - should encourage provision by the NHS itself, with increased provision of medical and care needs for severely neurologically impaired children becoming available.) A much larger group of children would therefore receive compensation under a no fault scheme than at present given that, by its nature, a no fault scheme would extend compensation to those children 60 Appendix B where there is no suggestion that negligence has occurred (or who are unable to prove negligence) but whose injuries are traced to their medical care. 5. Children whose problems are not attributable to their medical care, for example, those with a genetic condition or an acquired condition, are unlikely to be included in a no fault scheme (based on the existing schemes studied by the group). This matter greatly concerned the group. It may be, however, that, even if this group of children continues to be excluded from compensation under any proposed scheme, there would be some „collateral‟ benefit to them resulting from the retention of funds within the NHS, and a resultant improvement in the overall NHS provision of medical and other care for children with severe neurological injuries: in other words, more facilities should be available in general as a result of the investment in care facilities that would be feasible were future care needs met by healthcare provision rather than simple financial awards. In an ideal world, all children with substantial care needs, no matter what the cause, should receive all of the care they need from the NHS. 6. The possible benefits of this approach would be that: More children would obtain compensation, because of the removal of the requirement to prove fault; Compensation could be awarded much more quickly, because: a. There is no need to prove fault; b. Care needs would be met by a guarantee of ongoing care provision by the state, obviating the need to wait until the child‟s needs are fully established (which may be a matter of ten years or more) to avoid under-compensation; c. The award could be made by administrative means or tribunal, rather than following an adversarial process; d. Money currently leaving the NHS would be retained in the system, thus improving NHS resources overall; e. There may be a considerable saving in legal fees. 7. The interaction of any such proposed scheme with a residual right to litigate was not considered by the group in detail. However, the presence or absence of the right to litigate, and whether that right would continue the 1948 provision in relation to disregarding the availability of facilities provided by the state (with a no fault scheme with care guarantees in existence) would clearly have significant implications, including in relation to the likely take-up of the scheme. The group was strongly of the view that should such a scheme be adopted a residual right to litigate should remain. 61 Appendix C LIST OF EVIDENCE CONSIDERED Accident Compensation Corporation (ACC) New Zealand – (video conference) 27 January 2010 ACC moves to curtail rise in physiotherapy costs – (Article from British High Commission in New Zealand Health Bulletin) November 2009 An “Avoidability Test” – (A discussion paper by Peter Walsh, AvMA)) 18 March 2010 Causation and Practical Issues Arising – (A background summary briefing prepared by Andrew Pollock, Pursuer Solicitor) 10 November 2009 The Checklist Manifesto: How to get things right – (a book by Atul Gawande outlining measures to improve the quality and reliability of patient care http://www.amazon.co.uk/Checklist-Manifesto-How-things- right/dp/1846683130/ref=sr_1_1?ie=UTF8&s=books&qid=1265819604&sr=8- 1 Civil Court Review (http://www.scotcourts.gov.uk/civilcourtsreview/index.asp) – (Report by Lord Gill) September 2009 Civil Court Review – (Presentation– Colin McKay, SG, Legal System Division) 28 January 2010 Clinical Negligence and Other Risks Indemnity Scheme (CNORIS), risk management standards - (http://www.statutelaw.gov.uk/content.aspx?LegType=All+Legislation&PageN umber=1&NavFrom=3&activeTextDocId=3451351&parentActiveTextDocId=3 451351&showAllAttributes=1&showProsp=0&suppressWarning=0&hideCom mentary=1) - (Regulations by Nicola Sturgeon, Cabinet Secretary for Health and Wellbeing) February 2008 Coalition Government Programme – (http://www.cabinetoffice.gov.uk/media/409088/pfg_coalition.pdf) A Code of Health and Disability Services Consumers‟ Rights – (http://www.hdc.org.nz/the-act--code/the-code-of-rights) - (A publication by the New Zealand Health and Disability Commissioner) 15 April 2010 Comments on „no-fault compensation‟/consideration of different types of administrative alternatives to litigation/alternative tests of „fault‟ – (Discussion paper by Peter Walsh, AvMA) September 2009 Complaints, Claims and Apologies – (discussion paper by Scottish Public Services Ombudsman) December 2009 Cross Boundary Issues – (A discussion paper by Peter Terry, BMA) 4 June 2010 62 Appendix C Determining Eligibility for Compensation & Case Studies in Sweden – (a paper by Dr Anne Maree Farrell, Manchester University) 18 March 2010 Empirical study of medical negligence claiming in Scotland – (report by Manchester University research team) October 2010 English NHS Redress Act 2006 – (http://www.legislation.gov.uk/ukpga/2006/44/contents) European Convention of Human Rights - http://www.echr.coe.int/NR/rdonlyres/D5CC24A7-DC13-4318-B457- 5C9014916D7A/0/ENG_CONV.pdf “The Future of Negligence” – (a paper by Professor John Smillie) 15 April 2010 GMC Guidance of „Good Medical Practice‟ – (http://www.gmc-uk.org/static/documents/content/GMP_0910.pdf Greater Focus on Patient Safety – (http://www.beehive.govt.nz/release/greater+focus+patient+safety) - (article on New Zealand proposals for new, stand alone, clinically led government agency to lift quality and safety in frontline health services) February 2010 Harms included/not included in current system – (Discussion paper prepared by Andrew Pollock, Pursuer Solicitor) 4 June 2010 The “Hunter V Hanley” Liability Test & Practical Issues Arising – (A background summary briefing prepared by Andrew Pollock, Pursuer Solicitor) 13 October 2009 Hypothetical case studies tested against Swedish model – (information on results of case studies) March 2010 Improvements to existing system – (discussion paper by Andrew Pollock, Pursuer Solicitor) October 2010 Injury Prevention, Rehabilitation, and Compensation Amendment Bill 90-1 (2009) – (http://www.legislation.govt.nz/bill/government/2009/0090/latest/DLM241750) tabled by New Zealand Government passed as the Accident Compensation Amendment Act 2010 on 3 March 2010 Limited No Fault Scheme for neurologically impaired infants – (Discussion paper by Hugh Stewart, MDU) September 2010 Literature review – No Fault Compensation Schemes For Medical Injury: A Review – (Interim report by Dr Anne Maree Farrell, Ms Sarah Devaney and Ms Amber Dar, Manchester University) 28 January 2010 63 Appendix C Making amends: a consultation paper setting out proposals for reforming the approach to clinical negligence in the NHS -A report by the Chief Medical Officer http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/Publicati onsPolicyAndGuidance/DH_4010641 Medical Negligence Claims, Legal Processes in Scotland and England – (Discussion paper prepared by Prof G C A Dickson, CEO, MDDUS) 17 September 2009 Medical Negligence Claims, The Scottish System – (Discussion paper by Lauren Sutherland, Advocate) 17 September 2009 NHS Complaints Procedure – Can I help You? - http://www.show.scot.nhs.uk/publications/me/complaints/docs/1guidance0104 05.pdf NHS Litigation Authority (NHSLA) – (Factsheets) (http://www.nhsla.com/Publications/) NHS QIS Proposals for a national framework for incidents reporting and learning (a discussion paper prepared by Frances Elliot, NHS Chief Executive, outlining the work currently being undertaken by NHS QIS) New Zealand Reform Bill – (http://www.parliament.nz/en- NZ/PB/Legislation/Bills/b/6/b/00DBHOH_BILL9729_1-Local-Government- Auckland-Law-Reform-Bill.htm) December 2009 “No Fault” Liability and Human Rights – (Paper by Professor Jim Murdoch, University of Glasgow) 16 December 2009 Patients‟ Complaints System in New Zealand (http://content.healthaffairs.org/cgi/reprint/21/3/70.pdf) - (A publication by Ron Paterson) 15 April 2010 Patient Rights(Scotland) Bill (http://www.scottish.parliament.uk/s3/bills/42- PatientRights/index.htm) Patient Safety House of Commons Select Committee report http://www.publications.parliament.uk/pa/cm200809/cmselect/cmhealth/151/1 5102.htm Personal Injury Cases Data – (information paper from SG Justice Directorate) March 2010 Possible changes to and within Existing Framework / System – (A discussion paper by Andrew Pollock, Pursuer Solicitor)15 July 2010 64 Appendix C Possible Human Rights implications of the introduction of a “no-fault” compensation scheme in cases of medical harm – (Two papers by Professor Jim Murdoch, Glasgow University) 13 May 2010 “Putting Things Right” – (A discussion paper by Peter Walsh, AvMA, on the Welsh Assembly Government proposals fro Welsh Redress Scheme) 18 March 2010 Reforms to the Health Complaints System in Scotland – (A background summary briefing prepared by Steve Carney, SPSO) 16 December 2009 The Report of the Expert Group on Financial and Other Support in 2003 (Lord Ross‟ report) – (http://www.scotland.gov.uk/Resource/Doc/47034/0024918.pdf) Research Paper – (Short report presenting interim results of interviews with clinical negligence pursuers in Scotland) 4 June 2010 Role of the Health and Disability Rights Commissioner, New Zealand – (presentation by Ron Paterson former Commissioner) June 2010 Scottish Government Justice Directorate Response Paper – (A response paper by Andrew P Mackenzie, SG, Legal System Division to paper‟s “Legal Processes in Scotland” and England and “Scottish System”) 16 December 2009 Scottish Legal Aid Board (SLAB) – (Response to review Group questions on Clinical/Medical Negligence cases) 16 December 2009 Single Gateway – (Scottish Consumer Council response to SNP consultation) November 2009 Swedish Pharmaceutical Injuries Scheme – (Paper by Dr Anne Maree Farrell) April 2010 The Swedish Scheme – (a video Conference with Kaj Essinger, Senior Advisor, Swedish Medical Injury Insurance) August 2010 The Swedish Scheme – (Question & Answer Paper by Dr Anne Maree Farrell) April 2010 The Swedish System for Compensation of Patient Injuries http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2853784 – Article in the Upsala Journal of Medical Sciences by Professor Johansson, Medical Expert Swedish Claims Panel. Thoughts on No–fault Compensation – (Scottish Patient Association, discussion paper) September 2009 65 Appendix C Vaccine Damage Payment Scheme – (Discussion paper prepared by Kenneth Norrie, Strathclyde University) 10 November 2009 66 Appendix D DEFINITIONS We have set down below some broad definitions for certain words or phrases referred to in this Report in order to set the context for some of our considerations. Avoidability Test – tests to establish whether the harm would have been avoided by the use of „best‟ practice. Adverse costs - A court order requiring a party to court proceedings to pay the other party or parties‟ costs in relation to court proceedings. Causation - As well as proving breach of duty, a pursuer must also prove that the breach of duty caused the loss or harm complained of, or at least materially contributed to it. Compensation - Compensation is a wider term than damages, and covers the provision of something to the injured person (or the injured person's dependants in the case of death) in consequence of the injury or harm, and for the purpose of removing or alleviating its ill effects. Damages - Damages are a sum of money paid as compensation for loss, injury or damage resulting from an act or omission of the defender which is in breach of a duty owed. Experienced specialist rule – This rule considers whether injuries could have been avoided under optimal circumstances, in that the injury would not have occurred in the hands of the best health practitioner or health system. Harm – this may include flawed or inadequate consent; affront/outrage; breach of confidentiality; pain and suffering caused through unnecessary Treatment; loss of a probability of a cure/successful treatment. Injury - Physical injury (an incident or condition causing physical pain will, in general, be regarded as injury e.g. Inadequate anaesthetisation), psychiatric injury as confirmed by a Consultant Psychiatrist or Consultant Psychologist; wrongful birth (a mother who gives birth following a failed sterilisation to an otherwise healthy baby will be awarded damages for the pain and suffering of the childbirth even although medically, this might not be regarded as “injury”). Medical Error - is "the failure of a registered health professional to observe a standard of care and skill reasonably to be expected in the circumstances". This, by definition, requires proof equivalent to that of proving negligence; that is malpractice, in the same way as a medical malpractice claim under delict law. Non-negligent errors constitute medical misadventure only if they fall within the definition of 'medical mishap'. 67 Appendix D Medical Mishap - is very narrowly defined and is, therefore, highly restrictive in its application. It is defined as an "adverse consequence of treatment when, (a) the treatment given to a claimant, is given properly, and is given by or at the direction of a registered health professional; and (b) the adverse consequence is suffered by the claimant; and (c) the adverse consequence is 'severe'; and (d) the likelihood that treatment of the kind that was given would have the adverse consequence is 'rare'. NHS Indemnity - NHS bodies are legally liable for the negligent acts and omissions of their employees or agents in terms of the principle of vicarious liability, and should have arrangements for meeting this liability. NHS Indemnity applies to staff in the course of their NHS employment, as well as GPs or dentists, who are directly employed by Health Boards. It also covers people in certain other categories whenever the NHS body owes a duty of care to the person harmed, including, for example, locums, medical academic staff with honorary contracts, students, those conducting clinical trials on NHS patients, volunteers and people undergoing further professional education, training and examinations. NHS Indemnity does not apply to general medical and dental practitioners (or their employees) working as independent contractors under contract for services. General practitioners are responsible for making their own indemnity/insurance arrangements, as are other self-employed health care professionals such as chiropodists and independent midwives. NHS Indemnity does not apply to employees of private hospitals (even when treating NHS patients) local education authorities or voluntary agencies. Negligence – failure to exercise a duty required by law to show reasonable care, when doing or omitting to do something, in order to avoid loss or harm to others. It is not always medical practitioners who cause or contribute to injury – nurses, clinical support staff, laboratory staff, blood transfusion staff, pathology staff, administrative support staff may also contribute to injury. No-fault compensation - we use this to refer to compensation which is obtained without the need to proceed against the person responsible for the harm. Non-pecuniary damages - compensate for pain and suffering, disability and disfigurement, and inconvenience. Pecuniary damages - cover loss of income and medical expenses incurred as a result of the injury, but not covered by other insurance. Professional Negligence - A medical practitioner, like others exercising professional skills, must display and apply reasonable care and a reasonable standard of professional competence in order to avoid loss or harm to others. There is no automatic liability for accidents, and the test often depends on what is usual and normal practice. Deviation from usual and normal practice is negligence only if the course of action adopted is one which no professional man of ordinary skill would have taken if they had been acting with ordinary care. (Hunter v Hanley 1955 SC 200) However, the practice relied on must 68 Appendix D have been accepted by a responsible body of medical experts skilled in the field, their opinion must have had a logical basis, and the experts must have applied their minds to the comparative risks and benefits. (Bolitho v City and Hackney Health Authority 1998 AC 232) Provisional Damages - Provisional damages for personal injuries may be awarded where there is admitted or proved to be a chance that at some definite or indefinite time in the future, the injured person will, as a result of the act or omission which gave rise to the cause of action, develop some serious disease or suffer some serious deterioration in their physical or mental condition. In such circumstances, provisional damages are assessed on the assumption that the injured person will not develop some serious disease or suffer some serious deterioration in their condition. Future damages may then be awarded if they do develop the disease or suffer the deterioration. Redress – this may include investigations when things go wrong, remedial treatment, rehabilitation and care when needed; explanations and apologies; and financial compensation in certain circumstances. Standard of Proof - In civil actions, apart from exceptional cases, the onus of proof is on the pursuer, and the onus may be discharged on a balance of probabilities. Statutory Liability - Statutes may impose a standard more exacting than that of taking reasonable care. A statute may impose absolute liability, independently of negligence, and the defender will be liable, even if they have taken all reasonable care to prevent the harm complained of, provided it is proved that there was a breach of the statutory duty, and that the breach caused the harm. Total compensation - intended to put the injured party as nearly as may be in as good a position as they were in before the loss occurred", rather than just damages. Treatment – includes the giving of treatment; diagnosis of a medical condition; a decision to treat or not to treat; a failure to treat or treat in a timely manner; obtaining or failing to obtain informed consent to treatment; the provision of prophylaxis; application of any support systems including policies, processes, practices and administrative systems which are used by the treatment provider and directly support the treatment. It also includes failure of equipment, devices or tools which are used as part of the treatment process, whether at the time of treatment or subsequently. Failure of implants and prostheses are included, except where the injury is caused by general wear and tear. 69
"No fault Compensation Review Group"