Fixed costs in clinical negligence – What to expect

fixed costs in clinical negligence

In September 2023, the introduction of fixed recoverable costs for clinical negligence claims were announced by the Department of Health and Social Care (DHSC). Although the new rules are yet to be published, they are set to be introduced in April 2024.

In July 2023, the Civil Procedure Rule Committee cautioned the government regarding the challenges of adhering to the schedule, and the records from its meeting on 27 October 2023 indicated that the situation remained unchanged.

The DHSC has since confirmed that the new rules would be introduced “in due course.”

Fixed costs in clinical negligence – An overview of the expected changes

The introduction of fixed recoverable costs for clinical negligence claims represents a significant shift in the landscape of legal proceedings for both claimants and defendants in the healthcare sector. The changes, influenced by recommendations from Sir Rupert Jackson, aim to streamline litigation and reduce the spiralling legal costs associated with clinical negligence.

It is anticipated that the fixed recoverable costs will apply to clinical negligence cases with a value of up to £25,000, though the exact threshold may be subject to final adjustments. This bracket is intended to cover a wide array of claims, from minor injuries resulting from medical treatment to more serious cases that do not exceed the monetary threshold.

The proposed framework introduces a tiered system for handling clinical negligence claims, categorising them into the light track, standard track, and multi-track, based on their complexity and value.

Under the new rules, legal fees recoverable by solicitors will be capped. This means that the costs claimed in connection with pursuing a clinical negligence case will be fixed, depending on the value of the claim and the stage at which the case is settled.

Potential impact of the changes

For claimants, the primary advantage lies in the increased predictability of legal costs and potentially faster resolution of claims. However, there is concern amongst patient advocacy groups and legal professionals that fixed costs may deter solicitors from taking on complex cases that require extensive investigation but are valued under the threshold.

Legal practitioners, particularly those specialising in clinical negligence, may need to adapt their case management strategies. They will have to work within the constraints of fixed costs, ensuring they can adequately represent their clients while remaining financially viable. 

One of the critical debates surrounding the implementation of fixed costs revolves around the potential impact on the quality of legal representation.

There is a risk that the cap on recoverable costs could lead to a ‘race to the bottom,’ where law firms might minimise the amount of work done on each case to maintain profitability. This could adversely affect the thoroughness of case preparation and the overall quality of representation available to claimants.

It is expected that the DHSC will outline exceptions to the fixed costs regime for particularly complex cases that require more extensive legal work. These exceptions will be crucial for ensuring that claimants with complicated cases are not disadvantaged by the new rules.

The criteria for exceptions and how they will be applied remain a key area of interest for all stakeholders.

Looking ahead

As the legal and healthcare communities await the publication of the final rules, the discourse continues regarding the balance between cost-efficiency and access to justice. The introduction of fixed recoverable costs in clinical negligence cases is a bold move, with significant implications for how medical negligence claims are managed and resolved.

How Recovery First can help

If you’re concerned that the upcoming clinical negligence fixed costs rules are likely to have an impact on the survival of your law firm, you may wish to consider exiting the market.

Selling Work in Progress (WIP) as a means to exit the clinical negligence market can serve as a beneficial strategy for firms impacted by the new fixed costs rules. This approach enables firms to redirect their attention towards more lucrative practice areas.

In the worst-case scenario, you may be required to close your firm due to insolvency. Recovery First can assist you in this situation to ensure a compliant closure mitigating the risk of SRA intervention.

Whichever route you choose to take for your firm, Recovery First will ensure the most positive and profitable outcome is achieved.

Our clients receive 100% of their recoverable WIP, plus their allocated entitlement to deductions from damages and their paid disbursements, anecdotally returning significantly higher value than a traditional WIP sale.

The unique scheme offered by Recovery First is suitable for both law firms and for professional advisors working with law firm clients. Our team manage the transfer of files from start to finish; placing case files with an approved law firm to protect the integrity of the client’s case, while at the same time maximising the value of the work in progress.

We guarantee 100% confidentiality for all clients. If you would like to find out more about Recovery First’s process, feel free to get in touch today.

It's never too late to speak to Recovery First. Contact us now in the strictest confidence

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