23/08/2015 18:11 BST | Updated 23/08/2016 06:59 BST

Legal Fees and Cancer Drugs: The Cost to the NHS Is the Same

It was heartening to read this week in a report by the NHS litigation authority that the legal costs claimed by lawyers for a litigation claim had been refused by the courts. In this instance the lawyers had secured their client a relatively small pay out of £5,000 but were trying to claim £120,000 in legal fees. This included charging up to £800 per hour for their work and up to £400 an hour for work done by people who were described in the report as 'unqualified'. These charges far outstrip even the most outrageous fees for out of hours locum doctors as reported in the Daily Mail.

We need the lawyers. They are necessary to maintain a safe and effective healthcare system. They are part of the mechanism that holds doctors who practice negligently or dangerously to account and ensures that patients to whom harm has been done are properly compensated.

But the current system is out of control and open to abuse from cynical and profiteering legal firms. How can it be right that a patient who has suffered is awarded £5,000 and his lawyers receive 24 times as much?

Last year the NHS spent £1.1 billion to settle legal claims and this is expected to rise to £1.4 billion this year. The majority of this money does not go to the injured parties. To put this expenditure into context, the NHS spends approximately £1.3 billion annually on cancer drugs.

The problem is that this expense to the healthcare system is self-perpetuating. Health care providers insure themselves against litigation and, as litigation costs spiral, so does the cost of the insurance. For example, GPs indemnify themselves via one of several not for profit medical defence organisations and the indemnity costs for GPs have been rising dramatically. Where a GP would typically have paid around £6,000 per year for indemnity a few years ago, many GPs now pay £10-15,000 and some are quoted figures of around £30,000.

These rises have been especially sharp for GPs who do lots of out of hours work. Out of hours shifts are seen as particularly risky because GPs see patients with whom they are not familiar in an environment that may not be familiar to them. It has reached the point where GPs have to do so many extra shifts just to cover the cost of the indemnity that it becomes pointless for them to do any out of hours work, it just doesn't make them any money but it does put them at increased risk of getting sued or losing their license to practice.

On top of these costs are the more hidden, less definable costs to both the health system and to patients. For fear of litigation many doctors have developed the habit of practicing defensively, tending to over investigate every patient so that the rare things aren't missed in any patient. Beyond the financial cost of extra investigation is the physical and psychological cost to patients of undergoing investigations which may be time consuming, unpleasant and anxiety inducing. Targeted investigations are important but blanket investigations can be quite damaging.

There are alternatives to our system. 'No-fault' compensation schemes have operated for decades in New Zealand and throughout Scandinavia. Under these schemes it is not necessary to prove that there has been any fault or any negligence. Compensation is purely dependent on the extent and nature of the injury sustained. In these schemes legal costs are low, claims are settled quickly, and the no-fault culture aims to foster openness and honesty with the intent of reducing future mistakes. This is quite the opposite of the culture of fear and antagonism that our adversarial system creates. No-fault schemes are by no means perfect but they do allow compensation to be paid without protracted and expensive legal wrangling.

So it is good news that the courts refused the exorbitant £120,000 legal fees but it is the exception rather than the rule. Hopefully it will set a trend for reining in the runaway legal costs that are a genuine threat to our NHS, and hopefully our system will be reconsidered to create a system that is better for patients, doctors and the tax payer alike.