Source · Select Committees · Public Accounts Committee
Recommendation 5
5
Deferred
Develop alternative dispute mechanisms to speed up decisions and reduce costs for less complex claims.
Recommendation
Legal costs in clinical negligence claims are disproportionate for medium and low volume claims. Legal costs in clinical negligence claims have risen sharply, with claimant legal fees increasing in real terms from £148 million in 2006–07 (in 2024–25 prices) to £538 million in 2024–25. At 19% of total settled claim costs it is unacceptable that so much taxpayers’ money continues to be spent on legal fees. NHS Resolution has worked hard to increase the number of claims resolved without litigation (83% in 2024–25, up from 66% in 2006–07). It has also expanded its use of alternative dispute resolution and mediation. There are considerable financial benefits to these approaches which have been well received by the legal sector. However, we are extremely concerned that low-value clinical negligence claims (damages of £25,000 or less) cost far more in legal fees than victims receive in damages, with a 3.7:1 cost-to-damages ratio. The Department’s previous plans to limit the amount paid to lawyers in lower-value cases were not implemented as planned in April 2024 and remain under review. recommendation The Department should a. develop alternative dispute mechanisms to speed up decisions and reduce costs for less complex cases. As part of this, the Department should look at international examples (such as in New Zealand and Sweden) of non-adversarial and ombudsman models and assess how our ombudsman system could be improved; and b. clarify its position on a fixed recoverable costs scheme for lower-value clinical negligence cases at the earliest opportunity.
Government Response Summary
The government states the recommendation is under consideration and it is exploring international examples and policy proposals for reducing legal costs in clinical negligence. It will write to the Committee by Autumn 2026 to provide further information on its intentions, including a fixed recoverable costs scheme.
Government Response
Deferred
HM Government
Deferred
The Committee’s recommendation is under consideration by the government. mechanisms and ways to reduce costs for less complex cases and speed up resolution. Disproportionate legal costs for low value claims is a key concern in this area of work. For the smallest/lowest value claims, payments to lawyers for processing claims can be over 10 times the compensation for the patient. For claims with a damages value under £50,000, a total of £184 million is spent on lawyers’ fees each year and only £70 million goes to patients as compensation. DHSC is also taking account of international examples to see what lessons can be learned about resolving claims outside litigation, but it remains important to note that other countries’ healthcare and legal systems are not directly analogous to the NHS in England and the English legal system. The government will write to the Committee by this Autumn 2026 to set out the case for change and provide additional information on the department’s intentions. However, specific policy proposals, like alternative dispute mechanisms, remain under consideration within government at this time. 5b PAC recommendation: The department should: • …clarify its position on a fixed recoverable costs scheme for lower-value clinical negligence cases at the earliest opportunity. The Committee’s recommendation is under consideration by the government. costs of resolving all clinical negligence claims should be proportionate to the damages awarded, as well as the need to speed up resolution so as to mitigate the emotional impact of the process. As previously described, the disproportionate legal costs attached to lower-value claims is an area of focus for David Lock KC and DHSC, and DHSC is working through policy proposals, including fixed recoverable costs, to assess their impact and how the government can achieve the best outcome for the taxpayer and for those who have suffered harm. The government will write to the Committee by this Autumn 2026 to set out the case for change and provide additional information on the department’s intentions, including Fixed Recoverable Costs.