Source · Select Committees · Public Accounts Committee
Recommendation 21
21
Deferred
Claimant legal fees for clinical negligence have significantly increased as a proportion of total.
Conclusion
Claimant legal fees have increased in real terms from £148 million in 2006–07 (in 2024–25 prices) to £538 million in 2024–25 and now represent 15% of all settled costs. During the same period, NHS’s legal costs increased in real terms from £76 million to £159 million, but fell as a share of total settled costs (from 7% to 4%).52 NHS Resolution told us it had broadly kept the increase in defence costs level with inflation by using fixed and capped rates for its external legal support.53 It also claimed to have saved over £138 million in 2024 by challenging the bills presented by claimant lawyers.54
Government Response Summary
The government is considering alternative dispute resolution mechanisms to reduce legal costs, and will provide additional information by Autumn 2026.
Government Response
Deferred
HM Government
Deferred
The Committee’s recommendation is under consideration by the government. Target implementation date: to be advised DHSC, working with David Lock KC, is considering alternative dispute resolution 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.