As chief executive of the NHS Litigation Authority, Catherine Dixon spends £75m a year on lawyers and pays out more than £1bn in compensation. Far from looking to haggle down claims, Dixon says the role is about learning from the mistakes of the past. Grant Murgatroyd reports

You can learn a lot from litigation. And Catherine Dixon, CEO of the NHS Litigation Authority (NHSLA), is a keen student. "We have 20 years' experience of dealing with what has gone wrong in the NHS that has resulted in a claim," she says. "Part of what we do is about taking learning and communicating and engaging with the NHS to try to stop mistakes being repeated."

Learning will serve as an important tool in trying to reduce the NHS' compensation costs in the long term. Since 2007-08, the organisation's bill for clinical negligence claims has risen from £456.3m to £1.095bn in 2011-12. "A significant factor is the raise in the number of conditional fee agreements (CFAs) underpinned by after-the-event insurance (ATE)," explains Dixon.

The rise in clinical negligence claims against the health service has coincided with the introduction and widespread adoption of ATE insurance. Claimants' lawyers were able to work on a no-win, no-fee basis and, until 31 March 2013, could charge a 100% uplift on costs while minimising risk by ensuring against losing the claim. On 1 April this year though, the law changed and ATE insurance is now limited and lawyers acting under CFAs cannot charge an uplift on costs. 

"We do think this will have an impact. However, it will take some time for pre-April CFAs to work through the system and thereafter it will be interesting to see whether claims continue to rise at the same rate," says Dixon. "It takes on average 13 to 14 months from us being notified of a claim to the resolution of that claim – which I think is really good – so there will be a lag while the old CFAs are coming through, but I am hoping that the significant increases we have seen in recent years will reduce."

Fair payouts

Dixon is at pains to stress that it is not the NHSLA's remit to reduce claim payments. "In terms of reducing individual claims, part of the remit of this organisation is to pay appropriately. If someone has been negligently harmed by the NHS and has suffered injuries as a result, it is appropriate that they are compensated for that. Yes, there is a negotiation that goes on around what is fair, but if someone has been negligently harmed it is our job to make a fair payment.

"But if a claim is, shall we say, less meritorious, then it is our role to make sure that it is defended. Of all the claims that came to us last year, more than 40% were resolved without the payment of any damages."

The NHSLA recently completed research into the causes of maternity claims over the last 10 years and found the single biggest influence was failure to properly monitor and/or respond to a change in foetal heart rate. The NHSLA is now working closely with the NHS, including hospitals, healthcare commissioners and Clinical Commissioning Groups (the replacement for Primary Care Trusts), as well as independent providers of care services into the NHS, to ensure that these lessons are applied in practice. 

Another example of how the NHSLA assists in disseminating knowledge is in the field of surgical procedures. The number of surgical errors – and hence future claims – can be reduced significantly by effectively implementing World Health Organisation surgical checklists.

In addition to dealing with clinical claims, Dixon is responsible for all of the non-clinical claims you would expect to arise in an organisation the size of the NHS. With more than 1.7 million employees in the UK, it is one of the largest employers in the world alongside organisations such as the US Defence Department, China's People's Liberation Army, Wal-Mart and McDonald's. Between 2007-08 and 2010-11 its bill for non-clinical claims rose from £25m to £48.1m. 

Outside expertscatherine-dixon-web

Like all public sector organisations, the NHSLA is under great pressure to reduce its costs, and Dixon says there is a lot of focus on doing work as efficiently as possible. "We are always under pressure to do things more cost effectively. We are not-for-profit and, as an organisation, we are pretty lean. In fact, a report by Marsh, the independent insurance broker, identified that we were too lean, which is not something you hear too often about a public sector organisation. It effectively said staff workloads were too high and we are now trying to address that, because it is important to get the work balance right."

In 2011-12 the NHSLA spent £76m on external defence legal costs and the figure for 2012-13 will be "slightly but not significantly" higher. Spending on claimants costs stood at £300m – a massive disparity driven by the aforementioned CFAs. "We outsource a lot of our legal work," says Dixon. "When a case is litigated, in other words when court proceedings are issued, we outsource the claim but continue to manage it."

How the organisation works with its external legal advisers is something Dixon has been looking closely at in recent months. The body is in the process of retendering for its panels of external law firms and an announcement confirming details of the new line-up is expected imminently.

Currently the NHSLA operates a 10-firm clinical panel consisting of Clyde & Co, Bevan Brittan, Browne Jacobson, Capsticks, DAC Beachcroft, Hempsons, Hill Dickinson, Kennedys, Ward Hadaway and Weightmans. 

There is also a non-clinical panel including firms such as Clydes, Weightmans and Hill Dickinson. 

"We look for experts," says Dixon. "They have to have a proven track record, be good at what they do and have the right people. But they also have to add value, so we ask: 'What support are you going to give to the NHS in relation to this work and to support learning from claims? How are you going to deliver it? How are you going to support initiatives? 

"Cost is clearly a factor. We know what the market is doing and we want to make sure that we keep the costs appropriate for a public sector organisation while still driving quality. It's very competitive because the panel firms are effectively competing against each other."

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Catherine Dixon: building the skillset

Dixon has been in the hot seat at the NHSLA for just over a year, joining the organisation in April 2012 from the National Society for the Prevention of Cruelty to Children, where she spent a little over two years as general counsel and company secretary.

She studied law at university before doing her Law Society finals in York. A training contract followed and Dixon found herself working in private practice at Eversheds, where in 1999 she came face-to-face with a common dilemma: should she work in private practice or move in-house?

"An opportunity came up to run the legal team at BUPA Care Services, which was the biggest division of BUPA, dealing with long-term care. I ended up on the divisional board as commercial director," she says. "It was a very commercial role as BUPA was acquisitive at the time, so I was doing a lot of corporate work and leading negotiations and it was helpful not to have legal in the job title. The risk is that you can be seen as the legal adviser, not as the person making the decisions."

After seven years at BUPA Dixon took time out – moving with her partner to Canada to enjoy a sabbatical and take a break from the law. During the trip she worked as an Outward Bound instructor, leading an expedition to Peru and a number of Women of Courage courses, taking abuse survivors into the mountains and working with them on trust-building exercises. 

She then took up a director role at the Vancouver Coastal Health Authority, where she worked on creating a shared service organisation for the six health authorities in British Columbia. Other business development projects she worked on during her stint with the Canadian authority included setting up a tissue bank and reconfiguring the provision of domiciliary care, which was one of the largest procurements in Canada with a $1bn (£660m) spend. 

She then joined the NSPCC in January 2010, before moving to the NHSLA in April 2012.

For the past year, Dixon acknowledges that striking the right work-life balance has been challenging. Opportunities to go sea kayaking, in which she is a qualified guide and instructor, have been limited. But that's not to say it's all work and no play. In the summer she will be cycling the 280 miles from London to Paris in 24 hours for Scope, a UK charity that supports disabled people. 

And, as well as the day jobs, Dixon has continued her studies. While at BUPA she took an MBA at the Open University. BUPA footed the bill, but the work had to be done in her own time. "It was tough to manage the job and the study," she says. "But I learnt a lot, particularly around financial strategy and making sure that I really understand the numbers, which is important for running any organisation. It gives you a much broader sense of how businesses work. The MBA also gave insight in some of the dynamics around people management and marketing, a much broader skillset than you would get working purely as a legal adviser."

Catherine Dixon is the guest speaker at Legal Week's Corporate Counsel Forum on 23-24 September at the London Syon Park Hotel.