David Lock on making sense of insurance claims

A person gets injured and makes a compensation claim. Who should pay the colossal costs of long-term care? The NHS, the insurer who stands behind the car driver or the employer who caused the accident?

In recent years, insurers have become adept at putting pressure on primary care trusts.to provide complex packages of care at great public expense, thereby reducing their own liabilities..

Most PCTs understand that they are 'pig in the middle' in such instances.but few take a stand. However, as budgets tighten and the cost of continuing care rockets, this is one area where forceful action by PCTs can deliver big savings by shifting.costs back to the insurers. But be warned. The insurers will not.give in without a fight.

Legal background

A clue to resolving such conflicts.lies in the little-read section 2 of the Law Reform (Personal Injuries) Act 1948. As part of the deal when the NHS was set up, personal injury claimants were given the right to claim the cost of private healthcare and not required to use the NHS, even if the NHS was ready, willing and able to provide all the healthcare the injured person required..

In 2004, the Court of Appeal dusted down the section and reaffirmed that it worked. If the injured person says: 'Sorry chaps, I'll go private', then the insurers have to cough up.

So how does this affect PCTs?.First, when the pressure comes on from the 'care co-ordinator' employed by the insurers to provide the patient with a grade seven nurse, 24-hour care for incontinence and horse riding lessons as part of the overall package, PCTs can dig their heels in and refuse to provide anything more than they would provide to a patient without a big firm of lawyers pushing their case..

And, when refusing the 'extras', the PCT can point out to the patient and their lawyers the effect of section 2 and suggest that the patient should get.the benefits by going 100 per cent private..

Room to.manoeuvre

The next tactic from some insurers is to threaten to issue judicial review proceedings against the PCT. They even appear to have a standard form of impressive words in a pre-action protocol letter. How should PCTs respond? Usually, by telling the insurers.to take a running jump. They do not.have the right to complain about the extent of the care package -.only the patient can do that. And the answer to the patient is that NHS services are means tested and the patient has a right to require the insurers to fund it.

What happens in practice? One of two things. Sometimes the patient, on advice from his or her lawyers, turns their fire on the insurers, asserts their section 2 rights and gets the insurers to fund the whole package. This could save the PCT up to£200,000 per case per year. Not a bad result for a few strong letters. The alternative is that the pressure stops and a reasonable care package is agreed..

There is a second option. That is to say that the patient has the right to look to the insurers to fund the care so the PCT will apply its resources elsewhere. While there is some judicial support for this approach (and it would save PCTs millions), it is not likely to survive legally in the long run. Pushing patients towards exercising their section 2 rights is a much safer way to get a higher standard of care for them than the PCT could afford and save money.

David Lock is a barrister and head of healthcare at law firm Mills & Reeve. For further information, contact david.lock@mills-reeve.com, www.mills-reeve.co.uk020 7648 9220