The House of Commons health committee has warned that government proposals to change the funding of clinical negligence cases could undermine access to justice and reduce compensation for some of the most seriously injured or disabled claimants.

In a report published today, the committee, chaired by Tory MP and former health secretary Stephen Dorrell, criticised plans to change the conditional fee arrangements for taking clinical negligence cases, ending the recoverability of success fees from the defendant.

The report said: ‘The committee is concerned that this could impact negatively on some of the most seriously injured or disabled claimants, both by reducing the value of final settlements (after erosion of fees) and by undermining access to justice.’

The Law Society responded by calling on the government immediately to postpone any introduction of changes to litigation and complaints within the NHS. The committee’s report ‘drives a coach and horses’ through government plans on litigation costs and legal aid, Chancery Lane declared.

The committee highlighted Lord Justice Jackson’s remarks on the ‘vital necessity of making no further cutbacks in legal aid’ for clinical negligence and the ‘crucial role’ played by legal aid in promoting access to justice.

It also noted evidence from campaign group Action against Medical Accidents, which suggested retaining legal aid for clinical negligence cases would save more than the £17m that the Ministry of Justice hopes to recoup by removing it.

The report on complaints and litigation in the NHS noted that the costs of litigation against the NHS are increasing year on year.

Evidence from the NHS Litigation Authority showed that between 2007/08 and 2009/10 total payments have risen by nearly 25%, from £633m to £787m.

Considering how the cost of litigation could be reduced, the committee rejected the idea of a ‘no fault’ compensation scheme, which is currently being considered by the Scottish government.

It heard evidence that such a scheme could increase the costs of settling claims against the NHS by between 20% and 80%, and said the change would increase the volume of cases and reduce the compensation available for those most in need.

It concluded: ‘The existing clinical negligence framework based on qualifying liability in tort offers patients the best opportunity possible for establishing the facts of their case, apportioning responsibility for errors, and being appropriately compensated.’

The committee also voiced concerns about the activities of claims management companies or ‘claims farmers’, who collect claims and charge a fee for passing on those likely to be successful to personal injury lawyers, sometimes via auctions.

It warned that the practice encourages people to go straight to litigation rather than use complaints resolution mechanisms, and said the bidding process used to sell claims on to lawyers may not lead to cases being allocated to advisers who are best able to resolve claims.

In addition, it said the presence of claims farmers ‘unduly’ contributes to the rising costs of litigation to the NHS.

Elsewhere, the committee welcomed the development of a rapid resolution for lower value clinical negligence claims against the NHS, which it said will speed up admissions of liability and access to redress for patients, and reduce costs for the NHS.

The Law Society welcomed the report, urging the government to postpone any introduction of changes to litigation and complaints within the NHS.

Law Society president Linda Lee also called for an investigation into the ‘potentially crushing’ effects on the victims of avoidable clinical negligence of the changes to legal aid and litigation funding outlined in the Legal Aid, Sentencing and Punishment of Offenders Bill.

‘The fact that under the government's current proposals many such victims of serious injury will now lose up to 25% of their compensation – or won’t be able to afford to take a case in the first place – will be found abhorrent by many,’ she said.