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The consultation affects claims above £1,000 and up to £25,000. The cap reflects what has been introduced for other categories of personal injury claims up to a value of £25,000 including road traffic accidents, employer liability and public liability.
The aim is to address the current lengthy and adversarial system of resolving claims which cost the NHS in England alone £1.5bn in 2015/16 with legal costs representing 34% of the expenditure.
The fixed recoverable costs scheme would apply across the NHS, not-for-profit and private healthcare providers in England and Wales.
The consultation also puts forward models for a cost reduction incentive when a defendant admits liability at an early stage, or fixes costs dependent on the stage of litigation that the claim is settled.
Arc Legal maintain the view that there is a large imbalance in the level of costs associated with using non-panel solicitor firms, and that this move may help level this out.
The consultation closes on 1 May 2017. Further information can be found here.
If you would like to discuss this further, please contact your Account Manager.