Financial Remedy Recommendations made by the Parliamentary and Health Service Ombudsman
Robert Thomas (University of Manchester)
This blog presents some data concerning financial compensation recommendations made by the Parliamentary and Health Service Ombudsman (PHSO) acquired through a freedom of information request.
When the PHSO makes a finding of maladministration or service failure, it will consider what remedy is appropriate. The ombudsman can recommend that the public body provide an apology. The PHSO can also make specific recommendations by which the public body concerned can improve its administrative processes and systems so as to prevent some problems from happening again.
Financial compensation is another remedy that the PHSO can recommend. As in legal remedies, the ombudsman seeks to put the affected person back to the position they would have been in had there not been any negative impact upon them. If this is not possible, then the next best remedy is for the ombudsman to recommend that the public body makes a financial payment to the complainant instead.
The PHSO assesses the level of compensation it thinks would be appropriate on the basis of its severity of injustice scale. The amount of compensation recommended will depend entirely upon the facts and circumstances of the individual complaint and the findings made. It is important to stress that compensation will perhaps be the remedy of most direct relevance to complainants who have suffered injustice as a consequence of maladministration or service failure.
The following questions then arise. How many financial compensation recommendations have been made by the PHSO? What are the amounts of compensation involved? And how often do public bodies comply with the PHSO’s recommendations to pay compensation to complainants who have experienced injustice?
We can then start by considering the total number of financial compensation recommendations made by the PHSO. This data is presented in figure 1. The number of recommendations varies over time. Most of them arise from health rather than parliamentary complaints. It is important to bear in mind that the health jurisdiction of the PHSO applies to the NHS in England only and that the parliamentary jurisdiction concerns UK central government.
Figure 2 shows the total amounts of compensation recommended by the PHSO per year by the type of complaint – health and parliamentary complaints – and also the total amounts (health and parliamentary complaints combined). The figure shows that the compensation amounts are almost always higher for health complaints than parliamentary complaints. The total amount of compensation has been fairly substantial. For instance, in 2014-15, the total amount of compensation was £1,546,393. This was for 870 compensation recommendations. This breaks down as follows: £1,089,812 for health complaints and £456,581 for parliamentary complaints.
What has been the total amount of compensation recommended by the PHSO? Over the years 2012-13 to 2020-21 inclusive, the total amount of money recommended for compensation was £7,106,191. This breaks down as follows: £5,353,717 for health complaints and £1,762,473 for parliamentary complaints.
What then are the specific amounts of compensation involved? As noted above, this depends on the facts and circumstances of the individual complaint. There is data concerning the number of financial remedies by reference to the amount of the compensation concerned. This data is presented in table 1.
It is clear that most compensation recommendations – for both health and parliamentary complaints – are in the £0-£5000 category. There is a small number of recommendations for higher amounts. For instance, in a small number of complaints concerning Continuing Healthcare, the PHSO has made financial remedy recommendations of over £250,000. People had wrongly been denied NHS healthcare by their Clinical Commissioning Group and had then been forced to ‘top up’ their care packages. The amounts involved vary but can be considerable.
When considering this data, it is important to bear in mind that the PHSO sits at the top of the redress system (for central government and the NHS in England). Many complaints are resolved lower down the redress ladder or pyramid. It is inherently difficult to know how these compensation recommendations compare with what complainants may or may not have been offered by the relevant public bodies concerned. That would require more research. Another point is that it also impossible to know what the outcomes might have been if people who did not escalate their complaint to the PHSO had actually done so.
Compliance with compensation recommendations
To what extent do public bodies comply with financial remedy recommendations made by the PHSO? The PHSO cannot legally compel a public body to pay compensation. It can only make recommendations. This has long been a source of debate about both the PHSO and ombudsmen in general. What then happens in practice? How frequently do public bodies comply and refuse to comply with the ombudsman’s recommendation to pay compensation?
The data sheds light on the issue of compliance by public bodies with compensation recommendations. During the years 2018/19 to 2020/21 (inclusive), the PHSO made a total of 811 compensation recommendations. Of all of these recommendations, only one was not complied with the public body concerned. In that instance, the amount of compensation involved was in the £0-£5,000 category.
That one case represents 0.12 per cent of the total of 811 compensation recommendations made. To put the point in a different way, 99.88 per cent of compensation recommendations made by the PHSO were complied with by public bodies. On this basis, it is reasonable to conclude that public bodies overwhelmingly comply with compensation recommendations made by the PHSO.
Some wider points
The data prompts a wider point about compensation for administration action and some comparison with formal judicial remedies. UK public law does not provide for compensation from unlawful administration. The courts cannot award compensation in this situation. There has long been discussion as to whether there should be such a remedy. The debate was recently highlighted in a recent and interesting blog by Jonathan Morgan. His view is that the absence of a power by the courts to award compensation for unlawful actions is a serious gap in our public law remedies. Jonathan also highlights the disparity between the lack of judicial remedies and the ability of ombudsmen to recommend compensation payments. People cannot go to the courts to get compensation for unlawful administrative action. By contrast, the PHSO can recommend that the public body pay compensation for maladministration. Of course, to some degree maladministration overlaps with the concept of illegality, but they are also distinct concepts.
Realistically, it currently seems unlikely that there will be a public law remedy in the courts for compensation arising from unlawful administration. Government would likely oppose it for financial reasons and for fear that it would open the floodgates for many such claims.
Two points can be made in this respect. First, the data from the PHSO over the best part of the last decade would suggest that the total amount of compensation – £7.1million – is a relatively small amount compared with the total volume of public spending. On the other hand, the amounts of compensation are very important to individual complainants who have suffered injustice. The governmental fear of opening the floodgates is not borne out by the experience of financial remedies recommended by the ombudsman.
A second point concerns the differences between court litigation and complaining to an ombudsman. Even if there was a public law remedy for compensation arising from unlawful administration action, the actual court process of pursuing such cases would likely carry significant risks for litigants. This is because of legal costs. In court litigation, costs follow the event. They are paid by the losing party. Legal costs can often be considerable running into potentially into the hundreds of thousands. Consequently, legal costs often have a deterrent effect on potential litigants; why risk having to pay high legal costs? This is the principal reason why so much judicial review litigation is settled out of court between the parties.
By comparison, ombudsmen are free to use. The issue of legal costs does not arise – unless complainants use lawyers to assist them. Unlike the adversarial procedures of the courts, ombudsmen are inquisitorial and use investigatory procedures. Ombudsmen undertake the work that in the formal judicial process is undertaken by litigants. Of course, this does not imply that there is no scope for change or improvement. Abolishing the MP filter and introducing own-initiative powers of investigation are well-rehearsed issues. Another possibility is perhaps more coordination between the courts and the PHSO as regards compensation.
Overall, two points can be made. First, compensation is an important remedy provided by the PHSO. Second, PHSO financial remedy recommendations are overwhelmingly complied with public bodies.