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Legal Costs in Personal Injury Claims Explained – Part Three – Medical Negligence Claims

In this blog, I will be discussing legal costs with respect to Medical Negligence Claims. I will explain when and how injured clients are entitled to recover some or all of their legal costs from a medical negligence claim.

When can an injured client recover some or all of their legal costs in a medical negligence claim?

With medical negligence claims, there are certain thresholds which need to be met in order recover any legal costs from the respondent medical practitioner or hospital.

The thresholds have been increasing each year since 2010.

The provisions of the Personal Injuries Proceedings Regulation 2014 sets out the prescribed amount and definitions for the declared costs limit and upper offer limit which is set out below in a table

Here are some practical examples using the table extracted above.

If the alleged medical negligence event occurred on say 1 March 2021 and the case either settled for $200,000.00 or went to trial and the trial judge awarded the same amount, the injured person would be entitled to recover what is called standard costs.

As a broad or general rule of thumb, we find that standard costs will result in the respondent medical practitioner or hospital (and more likely their insurer) pay at or about 50% or as much as 50% to 70% of your total legal bill. This amount or percentage can vary from law firm to law firm depending on the fee structure or client agreement which is also important to carefully consider before making the decision to retain any particular lawyer or law firm.

Again using the case example above, if the injured person had offered to settle their case for say $150,000.00 and the matter proceeded to trial and the trial judge awarded $200,000.00 then the injured person is likely to receive the benefit of an order from the trial judge that the respondent pay costs on what is referred to as the indemnity basis. In our experience, costs being awarded on the indemnity basis will generally result is a much higher award of costs in favour of the injured person and as much as 90% or even as much as 100% of the total legal costs being paid by the respondent.

If the same case settled for say $50,000.00 then the amount of legal costs the injured person can recover from the respondent is capped in the sum of $4,000.00 which is a very modest amount when considering how much work is required to prepare a medical negligence matter up to and including a settlement conference or mediation.

If the same case settled for say $40,000.00 then there is no contribution towards the injured person’s legal costs at all.

The costs threshold increases each year which will make it more difficult for injured people to receive the benefit of any meaningful contribution towards their legal costs. At the present time, the upper offer limit is $82,870.00 which simply means that to recover standard costs the settlement or judgment award needs to any dollar amount more than $82,870.00.

It is difficult to recommend medical negligence claims proceed if the upper offer limit can not be exceeded as medical negligence claims can be quite costly to investigate and prepare due to the need to engage medical specialists as expert witnesses and the claims are often strenuously defended by the insurance companies who defend the claims for the medical practitioners and hospitals.

The same costs thresholds set out in the table above also apply to motor vehicle claims and all other occupier liability and product liability claims.

This blog serves to highlight the importance for clients and their lawyers to carefully investigate claims or potential claims to ensure the economic viability of the matter before the claim is commenced and particularly for medical negligence claims.

Greg is widely regarded as one of Australia’s leading compensation law experts. Greg has a very healthy practice and enjoys providing his clients with superior personal service in every case. Greg is absolutely committed to achieving the best settlement outcomes for his clients while keeping the legal costs down.

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Your state has been updated to QLD. Practice areas on compensation law have been updated.