Consultation on Recommendations for No-Fault Compensation in Scotland for Injuries Resulting from Clinical Treatment

3. No-fault Compensation Review Group's approach and recommendations

3.1 The No-Fault Compensation Review Group established in 2009 to review the potential benefits for patients in Scotland of a no-fault compensation scheme, agreed that:

'a compensation system 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'.

3.2 The Review Group took a no-fault system to mean one in which there is no need to establish that any individual was negligent. However, they considered that the link between the (in)activity and the harm resulting from it (i.e. causation) would still need to be established.

3.3 The research team supporting the review reported (Farrell et al, 2010⁷) that previous research suggests that when an error has occurred, patients expect staff 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 of taking a case forward, rather than a financial award.

3.4 The Scottish Public Services Ombudsman (SPSO) has published advice in relation to apology⁸. This advice was referenced in the guidance issued to NHSScotland in March 2012 on the handling and learning from feedback, comments, concerns and complaints.

Question 1: What, if any, steps do you feel are necessary or appropriate to ensure that when an error has occurred, patients receive a meaningful apology?

(In relation to this we note the consultation⁹ by Margaret Mitchell MSP launched on 29 June 2012 on "A proposal for a bill to provide that an expression of apology does not amount to an admission of liability and is inadmissible as evidence, for the purposes of certain legal proceedings" and will watch the outcome with interest.)

3.5 The Group explored several well-established no-fault schemes in other countries with a particular focus on the systems in New Zealand and Sweden. Although these two schemes are different, each aims to facilitate access to justice; the provision of adequate compensation for injured patients; and the appropriate adjudication of claims. These are in line with what the Review Group believed should also inform the system of compensation in Scotland.

3.6 The research team's literature review (Farrell et al, 2010¹⁰) also identified specific advantages and disadvantages that are said to arise from no-fault schemes. These may be useful to you as you consider this consultation and the implications of introducing a no-fault compensation system. It should be noted that the advantages and disadvantages (reproduced below) reflect published studies of no-fault systems in other countries and are not necessarily definitive of how the systems actually work in practice:

3.6.1 Advantages (from literature review)

• 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 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).

3.6.2 Disadvantages (from literature review)

• 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
• 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 and promote institutional and professional accountability and learning in relation to (preventable/avoidable) medical injury
• 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 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 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).

3.7 Principles and criteria essential in a compensation scheme

3.7.1 The Review Group considered, developed and agreed that the following principles and criteria were essential in a compensation system:

• 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.

Question 2: Do you agree that the principles and criteria set out above are essential in a compensation system? Are there any to which you would attach particular priority or importance? Are there any others you would add?

3.7.2 In addition the Review Group identified a number of issues it believed were relevant to the likely success of any system and agreed that the following criteria were desirable:

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.

Question 3: Do you agree that these criteria are desirable in a compensation system? Are there any others you think are desirable and should be included?

3.7.3 The Review Group also considered and highlighted the importance of the wider issues identified below:

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.

Question 4: Do you have views or comments on how a compensation scheme could more effectively contribute to the wider issues identified?

3.8 Review Group's recommendations

3.8.1 Having considered the existing Scottish system; the existing system with some suggested improvements; and the New Zealand and Swedish systems against the principles and criteria set out at item 3.7.1 the Review Group's report¹¹ offered ten recommendations. This included:

Recommendation 1 - that consideration be given to the establishment of a no-fault scheme for medical¹² injury, along the lines of the Swedish model, bearing in mind that no-fault schemes work best in tandem with adequate social welfare provision.

(Background information on the "no-blame" system in operation in Sweden is included in Annex A. This describes a system whereby The Swedish Patient Insurance Association, a public company, administers the scheme which is financially supported through contributions made by county councils which are responsible for the provision of health care. Under the Patient Injury Act 1996 there is an obligation on both public and private health care providers to obtain insurance that covers claims being made in respect of medical injuries. Insurers that provide such insurance belong to the Patient Insurance Association.)

Question 5: Would you support the approach suggested in Recommendation 1? If not, why not and what alternative system would you suggest?

Recommendation 2 - 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.

(In Sweden the eligibility criteria are structured around the notion of 'avoidability' i.e. patients are eligible to receive compensation if they have suffered injury that could have been avoided. The Swedish 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. A retrospective approach has been taken in some cases in the evaluation of whether the injury was avoidable.)

Question 6: Would you support the approach in Recommendation 2? This would mean for example that where treatment carries a known risk and the patient has given consent to that treatment it would not be eligible. What other injuries would you consider should not be eligible?

3.9 Scope and cover of no-fault scheme

3.9.1 The Review Group was of the view that any recommended changes to a no-fault system should cover all healthcare professionals including those not directly employed by the NHS. However, some members suggested that there may be difficulties in including independent contractors (such as GPs, dentists etc) who provide services under the NHS 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. It was also recognised that introducing a no-fault system for NHS board staff and continuing the present adversarial arrangements for resolving claims against independent contractors, where there is continuity of care between a hospital and independent contractor would present practical difficulties. The group believed that fairness dictated that all patients whether they received NHS or private treatment should have access to an improved system if possible. If this proved impossible, the group nonetheless believed that there were benefits that could be obtained by a move to no-fault for NHS patients. The group's preference was that all patients should be covered by the no-fault scheme and offered:

Recommendation 3 - 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 - that the scheme should extend to all registered healthcare professionals in Scotland, and not simply to those employed by NHSScotland.

(As explained in the Cabinet Secretary's foreword we acknowledge that further work is needed to help in our understanding of the volume, level and cost of compensation claims handled by the Medical Defence Unions and private healthcare providers. We will seek to explore this further with the relevant stakeholders during the consultation period.)

Question 7: Do you support the view that, if introduced, a no-fault scheme should cover all clinical treatment injuries (e.g. private healthcare and independent contractors) and all registered healthcare professionals and not just those directly employed by NHSScotland? If not, why not?

What, if any, difficulties do you foresee in including independent contractors (such as GPs, dentists etc) and private practice? What are your views on how a scheme could be designed to address these issues?

3.9.2 The intention is that if introduced the no-fault system will not be retrospective. However, we would need to consider when and how we could transfer to a new system and how outstanding claims could be handled if/when a no-fault system was introduced.

Question 8: What are your views on how outstanding claims might be handled?

3.10 Level of payments under no-fault system

3.10.1 The Review Group did not favour the use of a tariff system for compensation, as it was considered that this would not address individual needs and it was unlikely that people would buy into a system where compensation was based on a tariff. The group therefore offered:

Recommendation 5 - that any compensation awarded should be based on need rather than on a tariff based system.

3.10.2 One of the essential criteria identified by the Group and shown at item 3.7.1 is that 'the scheme is affordable'. It is worth noting at this point that the lower and upper cost estimates given in the Study¹³ by the researchers are calculated based on a range of assumptions about how a no-fault system might operate; the potential increase in successful claims; as well as costs of the current system in recent years. The Study suggests that at the lower end (based on a 20% increase in successful claims) the costs of a no-fault scheme would be similar to the existing scheme, while at the upper end (based on an 80% increase in successful claims) the proportionate increase in public expenditure in a typical year could increase by one half. It should also be noted that the calculations are based purely on data on closed NHS Board cases handled by the Central Legal Office under the current arrangements. The calculations are based on an assumption that the level of payments under no-fault will be similar to the payments under the existing system. The researcher's report acknowledges that currently the majority of successful claims are settled out of court.

3.10.3 The disadvantages shown at item 3.6.2 indicate that in other countries the 'financial compensation/entitlement in the existing no-fault schemes are set lower than would be the case in successful clinical negligence claims brought under delict/tort-based systems'.

Question 9: Do you support the approach in Recommendation 5? If not, why not? What are your views on the suggestion that the level of payments will be similar to those settled under the current system?

3.11 Compatibility with the European Convention of Human Rights

3.11.1 The Review Group was satisfied that a no-fault scheme established as they describe would be fully compatible with the requirements under the European Convention of Human Rights. This is because they proposed - 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. They also thought that the retention of the right to litigate will ensure that those who feel the no-fault system is not appropriate will still be able to raise claims using this route. The group recommended:

Recommendation 6 - that claimants who fail under the no-fault scheme should retain the right to litigate, based on an improved litigation system

Recommendation 7 - that a claimant who fails in litigation should have a residual right to claim under the no-fault scheme

Recommendation 8 - 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 - 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.

Question 10: Do you support recommendations 6 - 9 as proposed by the Review Group? If no, why not? Do you have any concerns that the Review Group's recommendations may not be fully compatible with the European Convention of Human Rights? If yes, what are your concerns?