Management of group action claims in medical negligence: An introductory guide for defendant insurers, indemnifiers

Group action claims have become more prevalent in the healthcare sector over recent years as parties continue to recognise the benefits of bringing claims in this way.  

Group action claims can however present unique challenges for defendant insurers and indemnifiers, and it is therefore essential that those defending such claims understand the key challenges and tactical considerations.  

What is a group action?

Group action litigation refers to a group of claims involving several claimants, all of whom have been affected by similar issues, who join collectively to bring a claim against a defendant or group of defendants. These claims may be brought under formal procedural mechanisms such as Group Litigation Orders (GLOs) in England and Wales, or through informal co-ordination among claimants’ solicitors who consolidate cases for efficiency.  

Group actions commonly arise when multiple claimants have suffered the same or similar alleged harm, for example, by the same clinician/team of clinicians or due to the same defective medical equipment. Dealing with claims as part of a group helps to streamline the legal process by seeking to address similar issues at appropriate intervals, as opposed to dealing with the same/similar issues repeatedly for individual claims.  

Some of the key benefits of dealing with claims in this way include a reduction in costs, streamlining investigations by using a panel of tried and tested experts, consistent/predictable outcomes for both parties, and being able to work collaboratively with the claimants and their representatives. For defendant insurers and indemnifiers, however, group actions present distinct considerations in terms of exposure assessment, reserving, and defence strategy as the aggregation of claims may significantly impact the quantum of potential liability and the allocation of defence costs across multiple claimants pursuing substantially similar causes of action.  

Identifying a potential group action 

Early identification of a potential group action is critical for insurers and indemnifiers to facilitate appropriate reserving and the development of a co-ordinated defence strategy. 'Telltale' signs that a group action is emerging may include the following:

• an unusual increase in complaints or claims relating to a particular treatment or clinician/team; 
• patterns of similar adverse outcomes across multiple patients;
• regulatory action against individual clinicians;
• product recalls;
• whistleblower disclosures;
• internal incident reports which highlight systemic issues, or
• the registration of a group litigation order on the Court’s group litigation register.  

It may also be possible to identify targeted marketing by solicitors looking to ‘recruit’ new clients affected by specific treatment. 

Once it has been identified that a concerning pattern is emerging, it is important to closely monitor this and start to investigate/gather intelligence at the earliest opportunity. Insurers and indemnifiers should establish robust notification protocols with their insureds to ensure timely reporting of circumstances that are likely to give rise to group action claims, and should closely monitor industry developments, regulatory investigations and legal publications, for early warning signs of coordinated claimant activity. 

Identifying a potential group of claims at the earliest opportunity provides insurers, indemnifiers and insured parties with the best chance of managing these claims proactively whilst managing media interest and any potential reputational damage.

Initial assessment and investigation

Once a group action has been identified, insurers and indemnifiers should undertake a prompt and thorough initial assessment to evaluate potential exposure and inform overall defence strategy.  This assessment should include:

• a review of the underlying policy/policies of insurance to determine the scope of cover; 
• applicable limits of indemnity and any relevant aggregation provisions;
• an analysis of the factual matrix giving rise to the claims (including the nature and extent of alleged harm), and
• the number of potential claimants. 

Consideration should also be given to the overall liability position and issues in dispute, including the strength of any breach of duty/causation arguments, limitation issues, and the likely strength of any potential defences. 

Early engagement with specialist legal advisers, and, where appropriate, technical experts, is essential to ensuring that the initial investigation of claims is comprehensive and that key evidence is preserved. Consideration should also be given to whether there is any potential contribution or recovery from third parties, and it is important to liaise with co-insurers or reinsurers as necessary (and where applicable) to coordinate the overall defence strategy and manage exposure across the relevant insurance programme. 

A comprehensive initial investigation by insured parties should include a standardised procedure for investigating and assessing potential claims. This may include a process by which potential claimants are identified, and a panel of independent experts are tasked with reviewing the clinical records and identifying any potential harm/issues. It is recommended that all this data is collated and stored on a secure database to track and analyse review outcomes across the patient cohort.  

Reserving and costs considerations

Reserving and budgeting can often present significant challenges for insurers and indemnifiers in group actions due to the inherent uncertainty regarding the numbers of claimants and likely outcomes. The numbers of claimants may fluctuate considerably as the action progresses making it difficult to establish reliable estimates of aggregate exposure. The value of individual claims within the group action is also likely to vary substantially depending upon the individual circumstances (and harm) in each claim. Whilst ‘test cases’ can also be helpful for setting precedents at an early stage; they may not necessarily be representative of the broader cohort in terms of value.

Group action litigation can also routinely span several years which introduces inherent uncertainty with regards to estimated legal costs, inflationary pressures and the potential for adverse developments in the law. Insurers and indemnifiers should therefore seek to adopt a ‘dynamic’ approach to reserving, with regular reviews and adjustments as the group/litigation evolves, and regular contact with their legal advisers to ensure that reserving estimates remain accurate. Consideration should also be given to the potential for settlement at various stages of the proceedings, and the impact of any adverse publicity on the commercial interests of the insured party. 

The aggregate legal costs of defending multiple claims can often be substantial, encompassing solicitors’ fees, counsel fees and expert witness costs and disbursements, which may escalate significantly as the litigation progresses. Insurers must carefully evaluate the proportionality of defence costs against the potential value of the claims and consider what mechanisms can be put in place to manage those costs, such mechanisms may include: 

• early resolution;
• agreements with claimant solicitors to not obtain ATE insurance policies and limiting expert evidence wherever possible.

The allocation of common costs across multiple defendants or insurers also requires careful co-ordination, and insurers should establish clear protocols for cost-sharing arrangements at an early stage to avoid disputes.  Adverse cost exposure in the event of an unsuccessful defence must also be factored into the overall risk assessment and insurers should remain vigilant to the funding arrangements of claimant groups, including the involvement of after-the-event insurers, as this is likely to influence the claimants’ appetite for risk and willingness to pursue claims.

Effective cost budgeting and ongoing monitoring is essential to ensuring that defence expenditure remains appropriate.

Strategic considerations

Once the initial investigation and assessment of claims have taken place, insurers and indemnifiers should carefully consider a range of strategic factors that will shape the conduct and outcome of the group/litigation. A key consideration is whether to adopt a collaborative or adversarial approach with claimants, weighing the benefits of early engagement and potential settlement against the risk of encouraging further claims or establishing unfavourable precedents. 

Whilst a collaborative approach may sometimes seem preferable, particularly to manage reputational damage for the insured, it may also signal a willingness to settle or compensate, which could attract additional claimants to join the group action who might not otherwise have come forward (or have a particularly strong case). This can significantly increase the overall exposure and costs, even in those costs which can be successfully defended. Early settlements or concessions may also set unhelpful precedents that bind the insurer to similar terms for all other claimants in the group and/or may also be interpreted to indicate an acknowledgement of wrongdoing or liability, which could make it more difficult to contest claims based on their merits. 

The decision as to whether to defend test cases or lead claims often proves critical, as the outcome is likely to have significant implications for the remaining claimants within the group and overall exposure. Insurers should therefore ensure that test claimants are truly representative of the overall group and that the issues selected for determination will meaningfully advance the resolution of the litigation. Careful consideration should also be given to the reputational impact on the insured party, and whether early resolution, even at a higher cost, may be preferable to protracted public proceedings/publicity.  

Co-ordination with co-defendants, co-insurers, and reinsurers is essential to ensuring a unified defence strategy and to ensure consistency in approach to claims within the group. The overall defence strategy should carefully balance the risks and benefits of early resolution, costs savings and reputational protection.  

Finally, insurers should remain alert to opportunities for alternative dispute resolution, including mediation or structured settlement schemes, which may offer a more cost-effective and controlled means of resolving the claims whilst preserving the insured’s commercial relationships and reputation.   

Conclusion

To conclude, group claims and litigation present a complex and evolving landscape that requires careful strategic consideration from insurers and indemnifiers. The unique procedural mechanisms, costs considerations and reputational risks associated with these claims therefore requires a proactive and coordinated approach from the outset.  

By understanding the legal frameworks governing group actions, implementing robust early notification and assessment protocols, and engaging experienced legal expertise from an early stage, insurers and indemnifiers can position themselves in the best possible position to manage exposure effectively and achieve optimal outcomes. 

The team at Browne Jacobson has extensive experience of assisting healthcare clients with group litigation and is currently dealing with many high profile, grouped malpractice claims for healthcare professionals and providers. We are often instructed on associated inquests or inquiries or following an external investigation and work with colleagues across the healthcare practice to ensure a holistic approach to supporting these clients. We have pioneered the use of claims handling agreements which save time and cost and are known for our firm, but collaborative approach. Please do get in touch with the team if you require any advice or assistance in connection with a potential group action.