This guide is maintained as a current resource for August 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
Comprehensive guide to how legal costs are managed in clinical negligence claims in England and Wales. Explains funding options such as No Win, No Fee Conditional Fee Agreements, After The Event insurance, fixed recoverable costs reforms, cost budgeting and the “loser pays” rule for claimants, students and solicitors.
Clinical negligence claims arise when a patient suffers harm due to substandard care by a health professional or healthcare provider. Alongside the central issue of compensation for injury, one of the most complex and consequential aspects of these legal actions is how legal costs are managed. Legal costs include solicitor fees, barrister fees, expert witness expenses and various disbursements incurred in pursuing or defending a claim. Understanding how these costs work is essential for claimants, defendants (such as NHS Trusts), solicitors and members of the public.
This article explains how legal costs are managed in clinical negligence cases in England and Wales, the rules that govern them, the options available to fund a claim, recent reforms aimed at controlling costs, and practical considerations for claimants.
The “Loser Pays” Rule in Clinical Negligence
In civil litigation - including clinical negligence claims - the general rule is that the losing party pays the winning party's reasonable legal costs. This costs‑shifting principle applies once proceedings have been issued in the court. If the claimant succeeds, the defendant (for example, an NHS Trust) usually pays the claimant's legal costs in addition to compensation. If the claimant loses, they may be ordered to pay the defendant's costs.
This rule encourages parties to consider the merits of their case before issuing proceedings because costs can be substantial.
Common Methods of Funding Clinical Negligence Claims
Because clinical negligence litigation can be expensive and unpredictable, most claimants use mechanisms that limit upfront financial risk:
1. Conditional Fee Agreements (CFAs)
Conditional Fee Agreements, commonly known as “No Win, No Fee” agreements, have long been the primary funding method for clinical negligence claims. Under a CFA:
- The solicitor agrees not to charge the client's basic legal costs if the claim is unsuccessful.
- A success fee (capped by law) is payable by the client if the claim succeeds. This success fee is an uplift on the solicitor's basic charges and is limited by statute to a percentage of certain heads of damages.
- The claimant typically also takes out After The Event (ATE) insurance to cover the risk of paying the defendant's costs and some disbursements if the claim fails.
If a claim succeeds, the defendant usually pays most of the claimant's legal costs. The claimant remains responsible for paying the success fee and the premium for ATE insurance from their damages unless costs are capped (see fixed recoverable costs below).
2. After The Event (ATE) Insurance
ATE insurance protects the claimant from the financial risk of losing and being ordered to pay the defendant's legal costs. It can also cover certain disbursements such as expert reports required to prove negligence. Premiums for ATE insurance may be recoverable from the losing defendant, subject to statutory and procedural rules.
3. Before The Event Insurance and Legal Expense Insurance
Some individuals may have legal expenses covered by pre‑existing insurance (for example, in household or contents insurance). This cover, known as before the event (BTE) Legal Expense Insurance (LEI), may pay legal costs without the need for a CFA.
4. Legal Aid
Legal Aid for clinical negligence is rare and generally not available for most claimant cases. There are very limited circumstances under which Legal Aid might apply, depending on financial eligibility and case type, but the removal of broader Legal Aid for personal injury and clinical negligence cases means this is not a common funding method.
How Costs Are Quantified and Assessed
Costs Budgets and Detailed Assessment
Where clinical negligence litigation involves court proceedings, parties must prepare costs budgets early in the litigation. These budgets outline anticipated costs and help the court manage proportionate expenditure. The court may limit costs recovery to those that are reasonably incurred and proportionate to the value and complexity of the case.
If the defendant disputes the amount a claimant seeks to recover, the court may order a detailed assessment hearing before a costs judge, who examines invoices, time spent and reasonableness of charges.
Recoverable Disbursements
Disbursements such as expert witness fees and certain court fees are generally recoverable from the losing party. Under recent reforms for lower value clinical negligence claims, items like expert report fees and ATE insurance premiums covering expert fees will be separately recoverable within the fixed costs regime.
Recent Reforms: Fixed Recoverable Costs
In recent years, the government has introduced reforms to control the rapid rise in clinical negligence legal costs. A new Fixed Recoverable Costs (FRC) regime applies to lower damages clinical negligence claims in England and Wales - typically those valued between £1,501 and £25,000.
Under this regime:
- Legal costs recoverable from the defendant are capped according to fixed bands, regardless of the actual costs incurred.
- Certain costs, such as expert report fees and associated ATE premiums, are separately recoverable in addition to the fixed costs.
The aim of these reforms is to make costs proportionate to the value of the claim, reduce disputes over costs, speed up resolution and protect NHS resources.
These reforms are continuing to evolve. Stakeholders - including claimant solicitors and NHS representatives - continue to engage with the government's proposals, and the specifics of the regime may be modified over time.
The Role of NHS Resolution and Defence Costs
For clinical negligence claims against NHS providers, NHS Resolution manages the defence of cases on behalf of NHS Trusts and primary care bodies. It engages a panel of law firms to handle litigation, negotiates settlements and manages defence costs.
Defence costs (the legal expenses incurred by the NHS) are significant and borne by the NHS budget. These can include solicitors' and counsel's fees, expert costs and administrative costs associated with defending the claim.
Practical Considerations for Claimants
Risk of Paying Defendant Costs
If a claimant pursues a clinical negligence claim and loses, they may be liable to pay the defendant's legal costs unless adequately protected by insurance. This risk underscores the importance of securing suitable ATE insurance or another funding arrangement before issuing proceedings.
Timing and Costs
Legal costs often escalate the longer a case continues. Many clinical negligence claims settle before trial, which reduces the overall costs for both sides. Early settlement discussions and negotiation under the protocol can limit the time and expenditure involved.
Transparency and Client Agreements
Solicitors must give clear, written information about costs, funding arrangements and potential liabilities before a client enters a CFA. Clients should ensure they understand how success fees, insurance premiums and recoverable costs work.
Final Thoughts
Legal costs in clinical negligence cases are managed under a system designed to balance access to justice, fair compensation for injured patients and proportionate expenditure. The general rule that the losing party pays costs underpins much of this framework. Funding options such as Conditional Fee Agreements, ATE insurance and fixed recoverable costs regimes help manage financial risks for claimants and defendants.
Recent reforms aimed at controlling costs in lower value claims reflect ongoing efforts to make the civil justice system fairer and more efficient. Clinical negligence claimants and defendants alike should seek up‑to‑date information and clear cost estimates from solicitors to understand the likely financial implications before proceeding.
